Research On The Relationship Between Leverage Of Real Economy Sectors And Real Estate Prices

Since the outbreak of the international financial crisis in 2008,a series of problems have emerged in China’s financial market and macroeconomic operation,such as the rapid increase in the leverage ratio of the real sector,soaring real estate prices,and the continuous accumulation of systemic financial risks.The financing system in China is dominated by indirect bank financing,and the land system has Chinese characteristics.Against this backdrop,real estate occupies a core position in the formation and accumulation of debt,and the accumulation of debt in the real sector has intensified the instability of the financial system and increased the downward pressure on the economy.Therefore,in formulating and implementing China’s macro policies,it is necessary to keep real estate prices and the leverage ratio of the real sector within a reasonable range.To correctly handle the relationship between "stabilizing growth" and "preventing risks",it is necessary to correctly understand the relationship between the leverage ratio of the real sector and real estate prices.Based on this,this paper first reviews the existing literature on the relationship between the leverage ratio of the real sector and real estate prices,and analyzes the impact mechanism among variables from the perspective of the structural characteristics of the leverage ratio in the real sector.Secondly,from the perspective of time-varying causal relationships,using a time-varying Granger causality model,it studies the causal relationship between the leverage ratios of different sectors of the real economy and real estate prices,depicting the interaction trajectory among variables.Finally,the TVP-VAR-DY model is used to study the spillover effects between the leverage ratios of different sectors of the real economy and real estate prices,as well as the strength of the interaction among variables.Empirical results show that: first,the Granger causality relationship between the leverage ratio of the real sector and real estate prices is very sensitive to the sample time points.There are both stable bidirectional Granger causality relationship stages with feedback transmission and unidirectional Granger causality relationship stages with one-way leading effects,as well as occasional non-Granger causality phenomena.Second,from the perspective of the dynamic spillover index,the overall spillover intensity between the leverage ratio of the real sector and real estate prices is at a moderate to high level throughout the sample period.The inflow and outflow indices of real estate prices have consistent trends in some stages and lead-lag deviations in others.In most time points,real estate prices have a stronger net spillover effect on the leverage ratio of the household sector,while the leverage ratio of the non-financial enterprise sector has a stronger net spillover effect on real estate prices.There are alternating positive and negative net spillover stages between the leverage ratio of the government sector and real estate prices.From the perspective of static spillover,the average spillover intensity of real estate prices on the leverage ratio of the household sector is higher throughout the sample period,while the average spillover intensity of the leverage ratio of the non-financial enterprise sector on real estate prices is stronger.The paper suggests that policymakers should have a proper understanding of the Granger causality relationship and time-varying spillover effects between the leverage ratio of the real economy sector and real estate prices,and attempt to find practical regulatory policies based on the "binding" relationship between leverage ratio and housing prices.Policymakers need to pay attention to the differences in spillover effects between variables.In the face of unexpected shocks,it is important to balance the relationship between short-term and long-term goals and try to maintain the sustainability of regulatory policies from a "cross-cycle" perspective.In the consideration of "stable growth" and "risk prevention" policies,a combination of macro policies should be used to enhance control over the leverage ratio of the real economy sector and real estate prices to ensure that regulatory effects are strong,appropriately focused,and effective.