"China Soft Science" 2015 issue 10  

Yu Yi-Hua, associate professor of Land Use Department of SPAP of Renmin University of China

Huang Yan-Fen, professor of SPAP of Renmin University of China.

Firstly, the paper demonstrated monetary policy have different regional effects on prices in different cities, spanned overflow between cities and prices and analytical framework of income's cross effect on prices. After that, taking use of China's 35 major cities panel data, this paper adopted GVAR model to carry out the framework of empirical research. The results show that changes in the money supply and positive impact on cities and housing prices is higher than the eastern city of its impact on the central and western cities. Rates fluctuate in Beijing-like cities have significant spill over effects on other cities' housing prices, while in the central and western cities spill over effect is not obvious. Housing prices of big cities and eastern cities are largely affected by the income changes of other cities, while the housing prices of middle and western cities are mainly affected by local income changes. Finally, based on theoretical analysis and empirical results, this paper proposes a targeted policy recommendation.