Date of Award
Bachelor of Arts
This paper studies the interaction effects between monetary policy actions and house price changes in China. I focus on the impact of M2 money supply on house prices in Beijing, the capital of China. A VAR model is constructed and shows that an M2 money supply shock has a significant positive impact on Beijing house prices from the fifth to the ninth month, whereas a house price shock has no significant impact on M2 money supply. To verify whether the impact of money supply is robust in different Chinese cities, I develop another VAR model to observe the housing market in Shenzhen, a first-tier city in southern China. The results show that an M2 money supply shock has only a small significant positive impact on Shenzhen house prices at one month, suggesting that the effect of money supply can vary due to institutional differences.
Zhang, Ziao, "Monetary Policy and Housing Market in China" (2017). Economics Student Theses and Capstone Projects. 40.