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Not all cities are alike: House price heterogeneity and the design of macro-prudential policies in China

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  • Funke, Michael
  • Tsang, Andrew
  • Zhu, Linxu

Abstract

This paper investigates the implementation of regionally differentiated macro-prudential policies in China. To assess the relative intensity of the city-level macro-prudential policies over time, we construct a time-varying city-level macro-prudential policy intensity indicator for 70 Chinese cities from 2010-2017. The empirical evidence shows China's macro-prudential toolbox has gradually evolved toward city-level policies tailored to granular local conditions to mitigate risks.

Suggested Citation

  • Funke, Michael & Tsang, Andrew & Zhu, Linxu, 2018. "Not all cities are alike: House price heterogeneity and the design of macro-prudential policies in China," BOFIT Discussion Papers 18/2018, Bank of Finland Institute for Emerging Economies (BOFIT).
    • Handle: RePEc:zbw:bofitp:bdp2018_018
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    More about this item

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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