| With the excessive development of the real estate market, researches on the asset prices transmission channels of monetary policy have transferred from the stock prices to real estate prices, but most of them are focused on the national macro level, and there are big differences among the empirical conclusions. Since 2005 the domestic literature had introduced the researches on the regional differences of the transmission effects of monetary policy, the domestic scholars began to pay attention to the theory of optimal currency area. But at present there are only two papers researching on the regional differences of real estate prices transmission effects of monetary policy and the regional division are based on the traditional method of eastern, central and western regions. However, there exists heterogeneity in economic fundamentals in each region internal, and the empirical results also did not explained the real causes for differences in effects, thus the suggestions are not feasible that different regions take its own monetary policy.In fact, the change of the effectiveness of real estate prices transmission channels of monetary policy caused by the differences in economic fundamentals mainly impacts on the first link of transmission. Comparative analysis on the differences of the prices transmission effects themselves should consider the regional real estate market’ differences more. From the literature review, we find the differences in the degree of the real estate market bubble have an impact on the prices transmission effects of monetary policy. Therefore, this paper firstly studied the real estate prices transmission effects of monetary policy and the regional differences based on the differences in the degree of the real estate market bubble form the theoretical perspective, and then did an empirical test from the national macro level. In the empirical studies, considering the price-income ratio as the index to measure the prosperity of the real estate market, we divided China’s 31 provinces. And then we selected the 10 provinces of highest and the 10 provinces of lowest based on the price-income index, further made empirical comparative analysis on the influence of different degree of the real estate bubble on the prices transmission effects of monetary policy.Results show that the first link of real estate prices transmission of monetary policy is more open, and there is obstruction in second link. The real estate market bubble is too large, which is one of the reasons for obstruction in the second link, and the regional differences in the degree of the real estate market bubble is also one of the reasons for the regional differences in the prices transmission of monetary policy. In the first link of the transmission, the control effect of money supply on prices is stronger than the control effect of interest rates on prices in short-term, but the long-term control effect of money supply on prices is relatively weak. Due to the expected effect, the monetary policy can control prices effectively in a short-term, but relatively weak in long-term. Especially in the regions which exist serious bubble, although the short-term monetary policy has a greater impact on the prices, it has no long-term regulatory ability. In the second link of the transmission, the rising prices form expectations for future inflation, but the positive effects on the social spending and investment spending will achieve only in the short-term, and the inhibition is stronger and durable. The accumulation of the real estate bubble led to prices to rise has a stronger inhibition for consumption and investment, even unable to stimulate consumer spending of residents. The exuberance of the real estate market forms significant squeeze on the social spending and other industry investment, and the excess liquidity hoarding in the real estate market threatens to economic operation. The real estate market bubble in some areas of China is still serious, it is necessary to regulate and control the real estate market to dredge the prices transmission channels of monetary policy and build a healthy economic environment. |
