Asset Price Bubble, Monetary Policy and System Design In the Perspective of China's Real Estate Bubble Prevention

DOI

10.2991/iccessh-17.2017.189How to use a DOI?

Keywords

asset bubble; monetary policy; system design

Abstract

In July 2016, the Political Bureau of the Communist Party of China Central Committee made a rare proposal to curb the asset bubble. Although it did not say what kind of asset bubble was suppressed, obviously, the real estate bubble is the most critical issue. In current China, the purpose of buying house is not only for living but making money. Since the bubble itself is a currency phenomenon, the monetary policy is usually the first choice to curb it. According to the published literature, we find that monetary policy implemented by the central government failed to work effectively (in China relying entirely on monetary policy to curb the asset bubble can not work well). To cope with the estate bubble, we should also take into account of the state situation as well as the causes of the bubble, apart from the monetary policy. The land policy, financial system and construction of economy have close relationship with the asset bubble.Hence, in addition to the implementation of prudent monetary policy, we should break the monopoly of land leading by the government to reduce the cost. At the same time, we can impose a heavier tax on those who have several houses to limit those real-estate speculators. The government should pay more attention to the real economy and guide the use of government funds by fiscal policy.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yanling Yang
PY  - 2017/06
DA  - 2017/06
TI  - Asset Price Bubble, Monetary Policy and System Design In the Perspective of China's Real Estate Bubble Prevention
BT  - Proceedings of the 2nd International Conference on Contemporary Education, Social Sciences and Humanities (ICCESSH 2017)
PB  - Atlantis Press
SP  - 792
EP  - 795
SN  - 2352-5398
UR  - https://doi.org/10.2991/iccessh-17.2017.189
DO  - 10.2991/iccessh-17.2017.189
ID  - Yang2017/06
ER  -