Monetary policy, asset prices and consumption in China

Koivu, Tuuli

doi:10.1016/j.ecosys.2011.07.001

Cited by 43 publications

(13 citation statements)

References 31 publications

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“…Furthermore, in Shanghai, personal housing loans accounted for 90.9% in 2010 and 77.7% in 2012 of the consumer credit [9]. Hence, excessive money supply might have increased house prices [40]. Moreover, in 2012, approximately 4300 million square meters of urban commodity housing was still under construction.…”

Section: Introductionmentioning

confidence: 99%

Determinants and Sustainability of House Prices: The Case of Shanghai, China

Zou

Chau

2015

Sustainability

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Recent housing policies include measures for home purchase control and shanty town redevelopment. This study proposes sustainable pricing, in that the long-run equilibrium price is determined by the fundamentals of house prices. We argue that changes in CPI might have led to rapidly growing house prices and rather high price levels. We investigate the long-run or short-run impacts of new commodity housing completions, transacted square meters of commodity housing, and CPI for house prices in Shanghai. We adopt monthly data for the period of 2005-2010. We test for unit roots using both the ADF and PP techniques and structural breaks using both the Zivot-Andrews (Model B) and Perron (Model C) methods. Considering Cheung-Lai and Reinsel-Ahn finite-sample corrections, the results suggest a long-run equilibrium. Housing completions negatively impact house prices in the short run. A positive volume-price relationship is suggested. Housing sales affect house prices in the short run but not vice versa. Hence, the empirical evidence supports the search model. In addition, CPI is strongly exogenous with respect to the long-run relationship and thus is a long-term determinant of house prices. CPI also positively and drastically influences house prices in the short run. Therefore, a reduction in inflation rate could stabilize house prices, increasing the chances of sustainable prices in the future.

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Section: Introductionmentioning

confidence: 99%

Determinants and Sustainability of House Prices: The Case of Shanghai, China

Zou

Chau

2015

Sustainability

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“…Hal ini dikarenakan masyarakat lebih meminati penempatan aset dalam bentuk fisik dengan alasan keamanan. Penelitian serupa yang dilakukan oleh Koivu (2012) menunjukkan bahwa kebijakan moneter memiliki impact terhadap harga aset maupun perumahan (housing) yang selanjutnya berpengaruh positif terhadap pola konsumsi ISSN 1979-6471 Volume 19 No. 1, April 2016 Jurnal Ekonomi dan Bisnis rumah tangga di Cina.…”

Section: Pendahuluanunclassified

Analisis Pola Penempatan Aset Pedagang

Pradana

Saraswati

2016

jeb

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Monetary policy does not always go smoothly and effectively because it is influenced by ABSTRAKKebijakan moneter tidak selalu berjalan lancar dan efektif karena dipengaruhi oleh pola dan perilaku masyarakat dalam menempatkan aset. Hasil penelitian ini dengan menggunakan quota sampling menunjukkan bahwa jenis aset moneter, misalnya tabungan di lembaga keuangan formal, menjadi lebih disukai oleh 74,80% pedagang di Salatiga, diikuti oleh aset dalam bentuk tabungan di lembaga keuangan non formal dan asuransi. Penelitian ini menemukan bahwa tidak ada pedagang menempatkan aset mereka dalam bentuk obligasi. Sementara itu, dari segi aset fisik, menempatkan aset dalam bentuk tanah menjadi prioritas bagi hampir 30,08% vendor yang lebih suka melakukannya. Aset fisik berikutnya adalah dalam bentuk bangunan, emas, dan ternak. Sebanyak 86% responden tidak tahu tentang variabel moneter, misalnya suku bunga dan inflasi. Bagi pedagang di Salatiga, tingkat suku bunga tidak menjadi pertimbangan dalam menempatkan aset. Oleh karena itu, hal ini menyebabkan kebijakan moneter dengan menggunakan suku bunga sebagai instrumen untuk mengontrol sirkulasi aktif menjadi tidak efektif.Kata kunci: kebijakan moneter, pola penempatan asset, aset fisik

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“…Stock market prices are affected rapidly and to a large extent by changes in monetary policy settings. Koivu (2009), for example, finds that, over 1998-2008, a one percentage point increase in the money supply leads to an increase in equity prices of 3.5% within two quarters. The impact of a similar increase in money on house prices is somewhat less (2.5%) and is spread out over a two year period.…”

Section: The Impact Of Monetary Policy On Asset Pricesmentioning

confidence: 99%

Reforming China's Monetary Policy Framework to Meet Domestic Objectives

Conway¹,

Herd

Chalaux

2010

OECD Economics Department Working Papers

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JT03294506As a result of reforms and financial sector development, the People's Bank of China (PBoC) now exerts significant control over money market interest rates. With money market conditions increasingly influencing effective commercial lending rates, the PBoC is also able to affect the cost of credit without recourse to its benchmark commercial bank rates. Furthermore, interest rates are an important determinant of investment spending in China, via the user cost of capital, and aggregate economic activity influences inflation. Hence, greater use of interest rates in implementing monetary policy would enhance macroeconomic stabilisation while avoiding a number of drawbacks of the current quantity-based approach. In addition, increased flexibility in the exchange rate would enhance its role in offsetting macroeconomic shocks and allow the PBoC more scope to tailor monetary policy to domestic macroeconomic conditions. Concurrently, changes in the PBoC's policy stance should be predicated on informed judgments based on the monitoring of a set of indicators in conjunction with a flexible inflation objective as the nominal anchor. This paper relates to the 2010 OECD Economic Review of China (www.oecd.org/eco/surveys/china). JEL Classification: E4; E5; E6; K2; L5Keywords: Money; Macroeconomic Policy; Regulation; China ************************************ Poursuivre la réforme de la politique monétaire pour accomplir les objectifs domestiques Suite à diverses réformes et au développement du secteur financier, la Banque Populaire de Chine (BPdC) contrôle désormais de façon significative les taux d'intérêt du marché monétaire. Les conditions du marché monétaire influençant de plus en plus les taux effectifs des prêts commerciaux, la BPdC est également en mesure d'influencer le coût du crédit sans recourir à ses taux d'intérêt commerciaux de référence. De plus, les taux d'intérêt sont un déterminant important de l'investissement en Chine, via le coût du capital, et l'activité exerce une influence sur l'inflation. Par conséquent, une utilisation plus active des taux d'intérêt dans la conduite de la politique monétaire contribuerait à la stabilisation macroéconomique tout en évitant certains des inconvénients de l'approche actuelle par les quantités. En outre, une plus grande flexibilité du taux de change renforcerait son rôle dans l'amortissement des chocs macroéconomiques et donnerait une plus grande latitude à la BPdC pour ajuster la politique monétaire en fonction des conditions macroéconomiques internes. Dans le même temps, les changements de politique monétaire devraient résulter d'une évaluation empirique basée sur le suivi d'une série d'indicateurs dans le cadre d'un ancrage nominal sous la forme d'un objectif d'inflation flexible. Ce document se rapporte à l'Étude économique de la Chine de l'OCDE, 2009, (www.oecd.org/eco/etudes/chine).Classification JEL: E4 ; E5 ; E6 ; K2 ; L5

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Monetary policy, asset prices and consumption in China

Cited by 43 publications

References 31 publications

Determinants and Sustainability of House Prices: The Case of Shanghai, China

Determinants and Sustainability of House Prices: The Case of Shanghai, China

Analisis Pola Penempatan Aset Pedagang

Reforming China's Monetary Policy Framework to Meet Domestic Objectives

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