Real Estate Speculation And The Revaluation Of Inflation Tax

Since 2000,China's money supply has risen much faster than GDP,but the price index has risen at a low rate,and the statistical inflation tax is only about 3%.According to Fisher's equation(money quantity theory)MV=PY,when the growth rate of M is much larger than the growth rate of PY,the velocity of money circulation is declining.Existing theories can not explain the problem of currency over-issuance,the rapid rise of the price index,the decline in the velocity of money,and the low inflation tax at the same time.This paper attempts to use a local government to monopolize the land market,the central bank to implement low nominal interest rate monetary policy,including rural and urban,real estate speculation and local government borrowing behavior models to re-estimate inflation tax,and at the same time explain the steady rise in price index and the problem of currency circulation speed reduction.This paper uses a three-generation over lapping generation models.In the theoretical part of this paper,we analyze the movement of population between urban and rural areas,residents' real estate speculation,local government land transfer and demolition behavior,land mortgage loans and infrastructure investment.The empirical analysis part of this paper first calibrates some important model parameters:this paper calibrates the model parameters according to the increase of the CPI,house price,GDP and other data in China.The numerical simulation results in this paper show that our model can match the reality of our country in many aspects(after 2008).Then the paper simulates the model through the parameters that have been calibrated,and re-estimates the proportion of post-inflation tax to GDP considering the factors of real estate speculation.The estimation results show that the proportion of China's inflation tax to GDP rose from 3.58%in 2008 to 9.79%in 2017.Therefore,this paper proposes a statistical method for re-estimating inflation tax.