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Housing and monetary policy: Fresh evidence from China

Author

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  • Yun Liu

    (College of Finance, Henan Finance University, Zhengzhou, China)

Abstract

We empirically address the effects of monetary policy on the housing market in China using a novel Time-Varying Parameter VARX model. We show that an expansionary monetary has positive effects on the housing market, while during COVID-19, the effects are approaching to zero or even negative. In addition, the effects of the LPR policy are strong and even larger than that of COVID-19. Relative impulse response functions in the shorter and longer time horizons are dynamic and especially during COVID. This paper also contributes to the housing literature to show that COVID-19 can block the transmission of monetary policy.

Suggested Citation

  • Yun Liu, 2022. "Housing and monetary policy: Fresh evidence from China," Financial Economics Letters, Anser Press, vol. 1(1), pages 1-12, December.
    • Handle: RePEc:bba:j00007:v:1:y:2022:i:1:p:1-12:d:123
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    References listed on IDEAS

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