Monetary Policy,Government Spending Shocks And House Prices

The real estate market is an important part of China's financial market,and the real estate price is also important to the national economy and the people's livelihood.Some macroeconomic variables,such as monetary policy,credit scale,exchange rate,and so on,can theoretically affect housing prices.As for the proposition of China's housing prices,many scholars have put forward the land finance,which is regarded as the local government's fiscal deficit,resulting in the government pushing up prices.This paper identifies the monetary policy and the government's fiscal expenditure by Bayesian estimation and symbolic constraints,discusses their impacts on house prices,and then put forward the policy proposal.The previous research on the real effects of macroeconomic variables,in monetary policy,especially the impact of interest rates on the prices of land,based on the financial perspective on the further recognition of fiscal expenditure impact on prices,this paper is innovative.In addition,the research done by predecessors,mostly through VAR or SVAR model,with a problem of this model is a large number of parameters need to be estimated,but the macroeconomic statistics data in China started late,the lack of the quantity of samples will make a model estimation error.In view of this,this paper uses the method of Bayesian estimation,the Bayesian estimation imposed a priori information through the parameters of the model,the prior information has greatly reduced the parameters to be estimated,the practice proves that the method can make accurate estimate of parameters.Specifically,this paper selects the monthly data from January 2006 to December 2016,use the sign-restricted Bayesian VAR model to identify the impact of monetary policy and fiscal expenditure impact their impact on prices,and through the variance decomposition identified two kinds of impact for the future price movements to explain their efforts.The empirical analysis shows that the tightening of monetary policy shocks can significantly affect prices,higher interest rates,money supply or reduce credit contraction can cause negative impact on prices;fiscal expenditure have a positive impact,prices will cause positive response in the next 8 months,indicating an increase in government expenditure is the cause of house prices rising.