Real Estate Prices. On The Monetary Policy Transmission Mechanism

Since 1998, under the together function of the housing system reform, the implementation of mortgage loan policy, the enhancement of the inhabitant's income and the accelerating urbanization, Chinese real estate market has obtained rapid development and deepening. The development and deepening of real estate market opens up the action scope of monetary policy and increases the transmission channels of monetary policy. But this process will make the monetary policy transmission mechanism more complex and increase the difficulty of the implementation of the central bank's monetary policy. Therefore, to realize the positive interaction between real estate market and monetary policy and improve the validity of monetary policy, the research on the channel of the monetary policy through the real estate market must be carried out. The thesis tries to study the transmission mechanism of the monetary policy through the real estate market systematically and expatiate the various links theoretically and practically.In theory part, the thesis separately expatiates the two around links of the channel of the monetary policy through the real estate market theoretically. In the first link, monetary policy exerts influences on the price of real estate by interest rate, credit and asset integration, In the second link, the change of the price of real estate exerts influences on the consumption and investment. In practical part, the effects of interest rate, monetary, consumption and investment are tested practically.On the basis of theoretical and practical analysis, the thesis draws the conclusion that the price of real estate can be an important channel of China's monetary policy transmission. In the first link, the interest rate effect is negative and also remarkable but the monetary effect is positive and not remarkable. So it is more effective for the interest rate to be the intermediary than money supply. In the second link, consumption effect and investment effect are positive. But the change of real estate price influences investment more remarkably. In order to clear out the transmission mechanism of monetary policy and improve the validity of monetary policy, the thesis suggests that monetary policy system and real estate market be reformed and perfected.