Monetary Policy,the Impact Of Shadow Banking On Housing Prices

Since the implementation of housing reform in China in 1998,China’s housing prices have continued to rise,from the average sales price of 2,112 yuan/square meter in 2000 to 7,892 yuan/square meter in 2017,during this 17 years,house prices rose by 273.67%.Faced with such a rapid increase in house prices is not conducive to economic development,but also to the protection of people’s livelihood.Therefore,in the report of the 19th National Congress,General Secretary Xi said that "the house is used to live,not for speculation," "cooling down"has become one of the problems that China urgently needs to solve.As of now,most scholars only study the impact of monetary policy on housing prices,mainly through the three channels of interest rate,credit and money supply.It is rarely considered that shadow banking influences the effect of monetary policy on house prices through credit creation function.This factor is taken into account when studying the impact of monetary policy on housing prices.Changes in real estate demand and supply will cause house price changes.When interest rates,bank credit and money supply change,for real estate demand side,it will affect the cost of home buyers to buy housing,which will cause changes in property demand,and ultimately lead to changes in house prices.For the real estate supply and demand side,it will cause changes in the cost of the developer and cause changes in the supply volume,which will eventually lead to changes in house prices.The existence of the shadow banking system will affect the money supply,change the regulation effect of bank credit and interest rate,weaken the influence of commercial banks and interest rates on the financial market through credit creation,and thus influence the effect of monetary policy on house prices.The empirical analysis includes two parts.The first part uses the PVAR model to study the effect of monetary policy on house prices.The second part uses the SVAR model to study the impact of shadow banking on monetary policy control.The first part of the empirical results show that the interest rate regulation of developed and sub-developed areas is effective in the second period and after;in the backward areas,interest rates are not effective in regulating housing prices,and raising interest rates will cause housing prices to rise.The use of bank credit for the regulation of housing prices in developed and backward areas is effective in the short-term effective long-term regulation,and is ineffective in the regulation of housing prices in the sub-developed areas;when the use of money supply is effective for the regulation of housing prices in developed and sub-developed areas,there is a lag.The lag period is one period.The second part of the empirical results is that the introduction of shadow banking variables for empirical analysis shows that the interest rate produces a standard deviation of information and the maximum positive response value of the house price in the first period is 0.22.Bank credit generates a standard deviation information that impacts house prices from the first period to the seventh period as a negative reaction,producing a negative response of-1.08 in the first period.The broad money supply produces a standard deviation of information that impacts house prices from the first period and after the positive reaction,producing a maximum positive response of 2.18 in the first period.Excluding the shadow bank variables for empirical analysis,it is concluded that bank credits produce a standard deviation of information shocks,and house prices are negatively reacted from the first period to the sixth period,with the largest negative response being-0.71.The broad money supply generates a standard deviation information shock,and the house price is positively reacted from the first period and after,and the maximum positive reaction of 1.61 is generated in the first period.The interest rate produces a standard deviation of the information,and the house price produces a maximum positive response of 0.25 in the first period.Through empirical analysis and comparison,the existence of shadow banking will impact the effect of monetary policy on housing prices.