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- Title
House price volatility in China: Demand versus supply.
- Authors
Germaschewski, Yin
- Abstract
This paper studies the transmission mechanisms that underlie China's house price fluctuations using a dynamic stochastic general equilibrium (DSGE) model. The model is estimated with Bayesian methods, which accounts well for business cycle properties of the housing market. Results show that shocks to housing productivity and the government land supply to housing developers are the primary contributors to house price volatility, accounting for 37% of house price volatility in the short run and 32% in the long run. The importance of housing valuation shocks and shocks to migration only increases in models without the supply side of the housing market.
- Subjects
CHINA; HOME prices; SUPPLY &; demand; BUSINESS cycles; HOUSING developers; PRICE fluctuations
- Publication
Economic Inquiry, 2023, Vol 61, Issue 1, p199
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/ecin.13112