What determines China's housing price dynamics? New evidence from a DSGE-VAR

Chunping Liu and Zhirong Ou

NBS Discussion Papers in Economics from Economics, Nottingham Business School, Nottingham Trent University

Abstract: We investigate what determines China's housing price dynamics using a DSGE-VAR estimated with priors allowing for the featured operating of normal and 'shadow' banks in China, with data observed between 2001 and 2014. We find that the housing demand shock, which is the essential factor for housing price bubble to happen, accounts for over 80% of the housing price fluctuation. We also find that a prosperous housing market could have led to future economic growth, though quantitatively its marginal impact is small. But this also means that, for policy-makers who wish to stabilise the housing market, the cost on output reduction would be rather limited.

Keywords: Housing price; Bubbles; Market spillovers; DSGE-VAR; China (search for similar items in EconPapers)
JEL-codes: C11 E32 E44 R31 (search for similar items in EconPapers)
Date: 2017-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.ntu.ac.uk/__data/assets/pdf_file/0035/3 ... -working-paper-4.pdf First version, 2017 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbs:wpaper:2017/04

Access Statistics for this paper

More papers in NBS Discussion Papers in Economics from Economics, Nottingham Business School, Nottingham Trent University
Bibliographic data for series maintained by King Lim ( this e-mail address is bad, please contact ).