Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174132
Authors: 
Liu, Chunping
Ou, Zhirong
Year of Publication: 
2017
Series/Report no.: 
Cardiff Economics Working Papers E2017/4
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 "bubbles" 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.
Subjects: 
Housing price
Bubbles
Market spillovers
DSGE-VAR
China
JEL: 
C11
E32
E44
R31
Document Type: 
Working Paper
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