Title :
Monetary policy, foreign speculative funds and house prices in an open economy: Empirical evidences from China
Author :
Lei, Feng ; Lin-zi, Zheng
Author_Institution :
Dept. of Land & Real Estate Manage., Renmin Univ. of China, Beijing, China
Abstract :
The escalating housing price crisis and financial deficiencies in recent years made the government to reflect on how and to what extent that money supply affects the housing market in China. This paper analyzes the relationship among monetary policy, foreign speculative funds, and house prices in China, using monthly data from January 2003 through December 2009. A VAR system procedure is employed by following Lastrapes(2002) within the Keynesian economy framework. The conclusions are as follows. (1) Foreign speculative funds is one of the most fundamental causes of the price volatility in China´s housing market. (2) In the short term real interest rate granger causes housing price fluctuation. (3) Shocks from money supply have a significant contribution to the price volatility in China´s housing market after year 2003.
Keywords :
pricing; property market; China housing market; Keynesian economy framework; VAR system procedure; financial deficiencies; foreign speculative funds; house prices; housing price crisis; housing price fluctuation; monetary policy; money supply; open economy; price volatility; short term real interest rate granger; Analytical models; Biological system modeling; Economic indicators; Electric shock; Stock markets; Technological innovation; VAR model; foreign speculative funds; house prices; monetary policy;
Conference_Titel :
Management Science and Engineering (ICMSE), 2010 International Conference on
Conference_Location :
Melbourne, VIC
Print_ISBN :
978-1-4244-8116-3
DOI :
10.1109/ICMSE.2010.5720003