A Study On The Impact Of Financial Liberalization On China's Real Estate Economy

The theory of financial liberalization was formally proposed by a group of economists represented by Mackinnon and Shaw in 1970 s.The theory affirm that financial liberalization plays an important role in economic growth.Many developing countries have carried out reform of the financial liberalization,but the failure of financial liberalization reform in Latin America,Southeast Asia and other regions makes the financial liberalization effect strain to be complex.Financial fragility theory added another effect to financial liberalization in 1980 s.Therefore,financial liberalization has dual effects.On the one hand,it can promote economic growth,and on the other hand,it can increase risks and even lead to financial crisis.Relative to financial liberalization,real estate also has dual attributes.Real estate is initially a production factor and consumer goods.Land is an essential element in the production process.Therefore,from the perspective of real estate's production attributes and consumption attributes,it belongs to the category of real economy,and it has the function of stabilizing economy and developing economy.At the same time,as a kind of investable asset,real estate will show the same volatility as financial assets,and large scale fluctuation will have great threat to economic stability.Therefore,the dual property of real estate,on the one hand,can stabilize and develop the economy,on the other hand,it can produce unstable factors,which is not conducive to economic development.So what is the effect of financial liberalization on real estate? This paper will be study this problem.This paper investigates the effect of financial liberalization on the real estate economyThis paper will proceed as the order:theoretical analysis,current situation analysis and empirical analysis.This paper makes a comprehensive analysis of the impact of financial liberalization on China's real estate economy.As far as theoretical analysis is concerned,the theories of financial liberalization,the theory of financial liberalization and real estate economic growth,the theory of financial liberalization and the theory of real estate price fluctuation are mainly analyzed.The theoretical analysis of financial liberalization shows that financial liberalization can promote economic growth on the one hand,and on the other hand,it can exacerbate financial fragility and even lead to financial crisis.The theoretical analysis of financial liberalization and real estate economic growth shows that financial liberalization plays a certain role in promoting economic growth.The main way of financial liberalization affecting economic growth is to influence economic growth by influencing investment quantity and investment efficiency.The theoretical analysis of financial liberalization and real estate price fluctuation shows that financial liberalization plays a role in promoting the real estate price,and the impact mechanism is mainly through bank credit,foreign capital and financial accelerator.As far as the current situation analysis is concerned,the process of financial liberalization and the present situation of our country's real estate investment and the current situation of real estate investment in China are analyzed.It affirmed the achievements of China's financial liberalization reform,and pointed out the existing problems.At the same time,it also clearly describes the current situation of China's real estate investment.On the empirical analysis,from 2000 to 2015 between the first quarter data,using principal component to construct the financial liberalization index in China analysis method,to quantify the degree of China's financial liberalization,that liberalization in China continues to increase,this is our consistent with the gradual liberalization of the reform measures.Secondly,through the empirical analysis found that financial liberalization in China rising have promoted the increase in the number of China's real estate investment for China's real estate investment efficiency is not affected,the possible reason is the rapid growth of real estate investments crowding out other industry investment.Thirdly,the ARCH model is used to analyze the fluctuation of real estate price in China,and it is found that the fluctuation of real estate price in China is unsymmetrical.Meanwhile,by analyzing the financial liberalization index and the real estate price,we find that financial liberalization has promoted the continuous rise of real estate prices to a certain extent.The effect of financial liberalization on the last use of the VAR model is decomposed,found that the most obvious effects of financial liberalization is the growth effect,followed by the wave effect,that is to say the financial liberalization reform of our country at the present stage of the real estate,is generally more good than harm.In view of the above research,this paper puts forward the policy suggestions in two aspects: the reform of financial liberalization and the suppression of the blind investment in real estate.Financial liberalization has dual attributes,but we can't give it up,in the premise of continue to adhere to the reform of the financial system,blind investment control of the real estate market,firmly grasp the relative balance between real estate industry and virtual entities,thereby expanding the growth effect of financial liberalization and reduce the volatility effect.The main innovations of this article include: first,systematically organized events between first quarter of 2000 to the fourth quarter of 2015 in financial sector of China.According to the quarterly data construct financial liberalization index in our country.The index can reasonably reflect the process of financial liberalization in china.Second,the EGARCH model is used to analyze the asymmetry and leverage of real estate price fluctuation in China.