Study on the Transmission Mechanism of China's Monetary Policy in Controlling Real Estate Prices

In recent years, the "failure" of China's monetary policy on controlling the real estate market has raised a problem: Can the real estate market be effectively controlled by the monetary policy? This paper analyzed the mechanism of monetary policy on the real estate prices by the VAR model. The results indicated that the monetary policy will affect real estate prices through interest rates, bank credit and monetary supply. The paper also showed that there're long-term relationships between monetary policy and monetary supply as well as monetary policy and the real estate prices by making Granger test and impulse responses. Based on the fact that monetary policy can control the real estate prices, the paper puts forward to corresponding policies.