The Current Rapid Rise In Asset Prices In China Cause Analysis,

The asset price volatility, especially the obvious soar deviating from real economy,is a problem that the decision section of each nation want to evade. The policy-makers target is to as far as possible avoid over-heated econonmy and prevent economic depression in a long-term. After a soring price-tag diviating from the real asst price, huge price adjustment will come up and influence the real economy stability.By keeping the central bank stronger independence, performing transparent currency policy,making inflation targeting or similar currency and exchange rate arrangement, many countries have already obtained great achievements in controling the inflation on merchandise and service. But they have little counterplan for the inflation of asset price. In last 30 years,there's a obvious characteristic in industrial countries that the huge volatility of the asset price take place in the stable commodity price and the macroscopic economic environment.Many economists give their own theory explanations in the reason for this asset price volatility which deviates from the real economy.Fisher's "debt-deflation" theory emphasizes that excesssive liabilities and deflation are the main reasons which result in asset price volatility. Minsky's Financial Instability Hypothesis studies the influence of debt structure on economic entity's behavior. Kindleberger's "Manias, Panics and Crashes" model emphasizes the asset price volatility is the result that the investor lose their reasonableness. Hayek think the change of the currency supply makes asset price's variety. Summers studies the influence on asset price in different exchange rate systems through Impossible Triangle Theory. David E Bloom,G..Williamson's "Demographic Bonus" theory explained the age structure of population influence the asset price.On the foundation of foreign original theories about asset price volatility,the thesis discuss the reason that cause the quick soring price-tag in China by the analysis in monetary policy, exchange rate system, tax policy in the land , ownership of a share reform,demographic bonus theory, etc. The thesis also gives some suggestions in controlling the asset price volatility.