Research On The Impact Of House Price On Savings In China

Since the reform and opening up 40 years ago,China's economy has maintained a high-speed and sustained growth for a long time.It has been called the “Chinese miracle”,which has attracted many scholars to explore its internal motivation.Among them,high investment caused by high savings is considered to be one of the most important reasons..However,with the reduction of the return on capital investment,it will inevitably lead to the expansion of savings and the suppression of investment,which will cause a large amount of capital to be idle.The traditional investment-driven development model will be difficult to be sustainable,which requires exploring new ways for high savings and finding new momentum for China's economic growth in the new era..In this context,it is of great theoretical and practical significance to clarify the reasons for the formation of high savings in China.Most of the existing literature focus on the impact of housing prices on household savings,explaining the mystery of high savings in China from the perspective of residents,but has not reached a consensus conclusion.In fact,national savings include savings in the three sectors,which are residents,enterprises,and governments.The rise in housing prices not only affects household savings,but also affects the savings of the other two economic entities.However,there are relatively few documents studied from the perspective of enterprises and governments.At the same time,as a reflection of social wealth,this paper further analyses the transfer and redistribution of savings wealth among different sectors caused by rising house prices,which can not only answer the relationship between rising house prices and distribution of social wealth from the perspective of savings,but also help to reveal which sectors will accumulate more savings by rising house prices.In order to answer the above questions,this paper uses the China Regional Economic Statistical Yearbook 2005-2013 regional/state-level city panel data to identify the causal link between house price and savings using a fixed-effects model and a double-differential model,with a view to providing relevant policy development.Reference.Firstly,by systematically combing the relevant literature,this paper summarizes the theoretical mechanism of housing prices affecting the changes of residents,enterprises,government savings and savings among various departments,and puts forward the theoretical hypothesis to be tested,which lays a theoretical foundation for the empirical analysis of the article.The empirical research part selects the savings rate,savings deposits,and the proportion of savings in total savings in the total savings as the explanatory variables,and uses the exogenous shock of housing “restricted purchase” to accurately identify the causal effects of housing prices on savings,from a multi-angle test theory.The correctness of the hypothesis is to ensure the stability and credibility of the conclusions of this study.At the end of the paper,reasonable policy recommendations are proposed based on the research conclusions,and the follow-up research is prospected.The empirical analysis shows that:(1)On the whole,the rise of housing price has no significant impact on household savings,and the macro data does not support the claim that the rise of housing price causes the rise of household saving rate.(2)In the case of other conditions being unchanged,house price has a significant positive impact on corporate savings,the rise of house price causes the rise of corporate savings.(3)House prices have no significant impact on government savings.(4)The rise in house prices has a significant negative impact on the proportion of household savings,a significant positive impact on the proportion of corporate savings and no significant impact on the proportion of government savings.Rising house prices has shifted household savings to the corporate sector.The innovation of this paper is mainly reflected in the following aspects: First,unlike the previous literature,this paper studies the aggregate effect of housing prices on household savings from a macro perspective.Second,this paper studies the impact of housing prices on savings,not only from the perspective of residents,but also from the perspective of enterprises and governments,which provides new ideas for future savings research.Thirdly,no empirical literature on housing prices and savings has been found to analyze residents,enterprises and governments under the same framework.The empirical study on the transfer of savings between different departments provides a new perspective for understanding the economic behavior of various sectors.It also provides a reference for policy makers to formulate policies.Fourth,this paper uses the exogenous shock of housing purchase restriction,and the DID model to further identify the causal relationship between house price and savings.