A Study Of The Impact Of China's Money Supply On Real Estate Price

China's economy has achieved world-renowned achievements since the reform and opening up for 40 years.As an important part of China's economic development,the real estate industry has a pivotal position.However,at present,the level of real estate prices in China has far exceeded the affordability of residents.As of September 2018,China's broad money supply(M2)has reached 180.2 trillion yuan,far exceeding the major economies of the world such as the United States and Japan,showing serious economic monetization.However,the financial markets such as the general consumer goods market and the stock market have not seen the obvious ability to carry large amounts of money.Therefore,it can be judged that the rapid growth of money supply is an important reason for boosting house prices.This paper first analyzes the relevant theories of the money supply transmission mechanism from the theoretical level,including the interest rate transmission mechanism,the asset price transmission mechanism,and the credit transmission mechanism.Subsequently,it reviews the changes in China's money supply and analyzes the current status of currency over-issuance and its causes.On the basis of theoretical analysis and current situation analysis,the data of M2 and the average price of commercial housing in the past years since January 2000 are selected,and the vector autoregressive model is constructed and empirically analyzed.Using Johanson cointegration test and Granger causality test,it is concluded that there is an important relationship between China's money supply(M2 level)and the national average commodity price,and the money supply M2 is the Granger cause of rising house prices.Through the impulse response analysis and other methods,the impact of money supply on house prices reached the maximum in the second to third quarters,and it has a continuous positive pull effect in the long run.In order to comprehensively consider the impact of other macro-control policies on housing prices,this paper also considers the representative financial regulation policies such as loan interest rate and deposit reserve ratio,and points out that the benchmark interest rate adjustment is also the reason that affects house price changes and plays a significant regulatory effect.Finally,combined with the results of empirical analysis,it proposes to strengthen monetary policy control and expand capital investment channels.