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China's housing price fluctuations
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Unlike existing literature that has focused on the relationship between exchange rate and housing price, this paper studies the housing price fluctuations from the perspective of RMB exchange rate expectation to resolve the dilemma “guarantee housing price or exchange rate” after the sub-prime mortgage crisis. This paper shows that housing prices responded negatively to RMB appreciation expectation from 1999 to 2008, and positively from 2009 to 2019. After 2009, exchange rate expectation is the Granger causality of housing prices. After introducing the U.S.
23p
nguyenanhtuan_qb
09-07-2020
27
1
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This paper found that the increase in housing prices can significantly promote the consumption of urban households with housing in China. And the promotion effect increases with family’s net finance asset, i.e., the richer the families are, the more their spending rises. For the urban families without housing, the increase in housing prices inhibit their consumption. When housing prices rise by 1%, the consumption drop by 0.748%. The mechanism is that the increase in housing prices reduce the households’ marginal propensity to consume by higher precautionary saving motivation.
29p
trinhthamhodang2
19-01-2020
35
4
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