A Study On The Self Strengthening Effect Of Household Debt And House Price In China From The Perspective Of Financial Stability

Our country executes the housing commercialization reform since 1998,our country house prices and household debt have experienced a relatively rapid growth process,commodity house average sales price from 2112 yuan in 2000 rose to 6792 yuan in 2015,formal financial market surge in household debt of 1997 from 17.2 billion yuan to 25 trillion yuan in 2016.Soaring house prices and an expansion of housing mortgage loan triggered the housing bubble and concern for Chinese version of the "subprime crisis".This fear makes sense,originated in the us subprime mortgage crisis of the financial crisis has showed the close ties between financial markets and the real estate market.Real estate construction has many characteristics,such as long development cycle,capital intensive,the development of the real estate market in China in the recent 20 years without financial market credit support,since 1997,household consumption credit and the development of housing mortgage loan is an important driving force of the real estate market of our country grows vigorously,and house prices is also important impetus to the growth of household debt.For a long time,between household debt and house price changes form the strong two-way drive self-reinforcing relations,the formation of this self-reinforcing relationship when volatility in prices may be financial stability and the whole macro economic impact.As a result,the examination room between household debt and house price fluctuation self-reinforcing and its impact on financial stability has important practical significance.This article,based on the theory of financial instability of mishkin,household debt theory,theory of financial accelerator and debt deflation theory,theoretical basis,the integrated use of the combination of theory and empirical methods,selection of 1997-2016 China’s macro economic quarterly data,from the perspective of financial stability China household debt and the short-and long-term dynamic relationship between house price fluctuations and self-reinforcing mechanism.This paper on the change relationship between household debt and house price fluctuations and analyzes theoretical basis,and changes in household debt and housing prices in China in the recent 20 years the typical facts are discussed in detailed descriptive statistics,to household debt and on the analysis of the consistency of house price fluctuations,and on this basis to build the theory model between household debt and housing prices change,further put forward in this paper,the research hypothesis.By building a multivariate GARCH-BEKK model,the non-performing loans as a proxy indicator of financial stability,based on the changes of household debt and housing prices between self reinforcement effect and the influence of the self-reinforcing effect to financial stability has carried on the empirical test.In this paper,the empirical results show that:(1)household debt and house price fluctuation between the two-way drive self reinforcement effect,every 1% increase in household debt and housing sales price index to rise 0.01%,when house prices rose 1%,household debt balance will be increased by 0.04%,house price fluctuations and household debt balance,as well as their joint fluctuations are very strong in the ARCH effect and GARCH effect.(2)self reinforcement effect between household debt and house price fluctuations in the price fluctuations will have enlarged the accelerator effect to financial stability,household debt balance changes and house price fluctuations and the joint formed by fluctuation is the important factors that affect the financial stability.(3)bank of non-performing loans of financial institutions,such as change of obvious feedback mechanism,the existence of this kind of feedback mechanism will influence on the formation changes in house prices and household consumption credit supply,and self enhancement effect of household debt and housing prices have played an important role in amplifying prices impact.In this paper,the research for the deep understanding of the interaction between the real estate market and financial market and its potential impact is of great significance,for the government’s real estate market regulation and financial market regulation policy provide certain reference and help to prevent the real estate bubble and the unlimited expansion of credit of systemic financial risk.The real estate market in China,household debt market and the financial stability of the reality,combined with the textual research conclusion,in this paper,the regulation of the real estate market in China,family consumer credit policy and maintaining financial stability,etc.Put forward a series of targeted policy recommendations.