Does The Aging Population Weaken The Impact Of Monetary Policy On Real Estate Prices?

The real estate industry is an important industry in China’s national economy,and its price fluctuation is also affected by various factors.At the same time,as both the demand and supply of real estate need the support of credit funds,it is hard to ignore the impact of monetary policy.The sensitivity of micro subjects to monetary policy changes is the key for monetary policy to function in the process of monetary policy affecting real estate demand.Life cycle theory shows that individual consumption and investment behavior depend on the life cycle stage,which means that the sensitivity of real estate investment behavior of different age population to monetary policy will be different.Since the 21st,Chinese population structure has been gradually aging.Compared with developed countries,China entered the aging society at a later time,but in the 30 years after 2011,China’s aging will show an accelerated trend.By 2030,China will have the world’s oldest population with more people over 65 than Japan.Due to differences in the sensitivity of micro subjects to monetary policy in different life cycle stages,the increasing size of China’s elderly population is likely to change the impact of monetary policy on real estate prices.In the process of aging in China,it is of great important to study the influence of monetary policy on real estate price and analyze the relationship under the influence of aging population.This paper first classifies the monetary policy instruments and discusses the specific action mechanism of two different monetary policy instruments on the real estate price.Then,from the propagation path of monetary policy,this paper uses the path found by theory to influence the impact of monetary policy.The core part of population aging and theory is to elaborate the impact of population aging on the impact of monetary policy credit channels,interest rate and wealth effect.On the basis of theoretical analysis,relevant macroeconomic data from 1998 to 2019 are selected,and time-varying parameter vector autoregression model(TVP-VAR)is selected to verify the impact of the dynamic changes in China’s monetary policy and real estate prices in the period in which the samples are taken.Different impulse response and cumulative impulse response values are analyzed.The conclusion shows that the influence of the quantity,type and price of the two monetary policy instruments on the real estate price tends to weaken.It is at this stage that China’s ageing population begins to show itself,so it is considered exploring why the impact of monetary policy on property prices has weakened.Based on the annual data of Chinese 30 provinces,taking the dependency ratio of the elderly population as the proxy variable of population aging,systematic GMM method is adopted to conduct empirical analysis on the impact of population aging on monetary policy.The final results show that the aging population’s monetary policy on the real estate market is one of the reasons for the weakening effect of the real estate market.Aging has a stronger impact on quantitative tools than on price tools.Finally,combined with the theoretical analysis and empirical research results,this paper puts forward corresponding suggestions for the monetary policy reform and development in the context of China’s future population aging:1.Explore intermediate monetary policy objectives more in line with the characteristics of China’s aging economy to improve the effect of monetary policy regulation;2.Attach importance to the coordination and cooperation of monetary policy,tax policy,population policy and other political and economic policies;3.We should build a forward-looking response mechanism to avoid the huge impact of aging population on China’s real estate market.