House Price Volatility,the Selection of Monetary Policy Instruments and the Stability of Macro-economy:Theory and Empirical Evidence
This paper applies the simulation method on the basis of Dynamic Stochastic General Equilibrium Model with house sector and the test of spillover effect based on VAR GARCH(1,1)-ABEKK Model to analyze the relationship between monetary policy and house price.The results show that when monetary policy regulates and controls house market,the central bank should focus on quantity instrument of monetary policy.Meanwhile,the role of price instrument of monetary policy should not be ignored because quantity instrument may increase the effect of price on macro-economy.As to price instrument of monetary policy,the liberalized interest rate has bigger influence on house market than regulated interest rate,when it comes to quantity instrument of monetary policy,money supply is the same as credit scale;for asymmetry effect of monetary policy,the effect of quantity instrument on house price is bigger than that of price instrument.It is predictable that during the process of the interest rate liberalization,the effect of the liberalized interest rate will increase and the two instruments should be comprehensively employed.