Asymmetric Effect of Monetary Policy on Housing Price from Short-Term and Long-Term Perspectives
Kai Zhao*, Yi-Bing Hao**, and Wan-Shu Wu***
*School of Economics, Qingdao University
62 Keda Avenue, Qingdao 266075, China
**School of Statistics, Huaqiao University
668 Jimei Ave, Xiamen 361021, China
***College of Architecture and Urban Planning, Qingdao University of Technology
11 Fushun Road, Qingdao 266033, China
This study uses two main monetary policy tools, the real interest rate and M2, to investigate and analyze the correlation between monetary policy tools and housing prices. The sample period runs from 2006 to 2021 and the data frequency is monthly. The analysis explores the effects of the real interest rate and M2 on real estate prices through the integration of short- and long-term perspectives. The findings show that the real interest rate has no asymmetric effect on housing prices in the short term, but has a significant asymmetric effect in the long term. Monetary supply is asymmetric in both the short and long terms. In the short term, monetary supply tools are invalid for adjusting housing prices, while increasing the real interest rate could inhibit the rise in housing prices; in the long term, decreasing the real interest rate and monetary supply could inhibit the rise in housing prices.
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