The Research Of Real Estate Pirce Volatility And Financial Fragility In China

Since the 20th century, frequent financial crisis shows that, the real estate industry as theimportant one of pillar industries, the shock of its asset prices volatility to the financial systemin one country, is also with the rapid development of the world economy and derivativechanging constantly. Especially, financial crises will produce the lethal effect on the entirenational economy system in developing China, whose economic institution is still in the stageof exploration and perfection. At present our country in recent years with the development ofthe real estate industry, which is as a new industry the development is in the initial stage, andalso in the continuous development and perfection. However the real estate development hasclose contact with macroscopic economy face and financial institutions. So the impact of itsprice fluctuation on the financial system can not be ignored. Therefore we should pay attentionto both the external shocks and endogenous factor of real estate price fluctuation and explorethe influence on financial fragility of our country and the transmission mechanism, which is ofgreat significance for establishing financial risk monitoring and warning system accord with therealistic situation of our country and ensuring that the real estate market and the financialsystem health and stable development.Based on economic theory and econometric methods for background, discusses the contactway between the real estate market and the financial fragility in our country, and by using thevector regression model, establishes indexes of the structural vector regression model on behalfof the real estate price changes and the financial fragility by means of the unit root test, grangercausality test, impulse response function and variance analysis methods to analysis model ofdifferent variables of the relationship. Model test results show that the real estate pricefluctuation have significant effects on both macro economic vulnerability and microscopicsurface of the vulnerability of the financial institutions; The influence degree to the former isbigger, and the latter smaller but more sensitive reaction; In the short term the real estate pricefluctuations to macroeconomic and micro financial institutions have a positive effect, in thelong term present a negative influence; And the financial fragility worsen real estate pricefluctuations, the causal relationship between each other.In this paper there are some creative points: 1. For the first time commit to real estate pricesfluctuation and financial fragility in the view of empirical, better than the existing literatureonly on the real estate market and the financial system in one aspect of a certain factors to consider. 2. Sum up the effects mechanism between real estate market and financial fragility,than use various measurement to analysis and add. 3. And the related research institute of thesimple regression, VAR model is more advantageous to the study, complete and objective 4.This paper puts forward key point in the establishment of early warning of the risks system inour country.The shortages: 1.Because vector regression model is itself a lack of economic theory of thepremise, estimates for the coefficient model usually can’t explain them one by one. 2. Becausethe index system of financial fragility determined in academia is still in perfect stage, so thispaper the constructed financial vulnerability index selection in the index with part of thesubjectivity and empirical, so its conclusion does not have strict scientific. 3. To full analysis ofthe real estate market in China on the financial system of the vulnerability of the effect and thecharacteristic, rely on 12 years the cycles of time far is not enough, and in the choice of cycle inmature stable stage is generally the most appropriate, but China’s real estate marketdevelopment is still in the development stage, only ten years of data, and as a result of China’seconomy is in development period of reform, many of the fluctuation of data by policy andsocial situation of big effect.