TITLE:
Real Estate Dynamics and Wealth Effect: A Theoretical Assessment
AUTHORS:
Wen Bao
KEYWORDS:
Real Estate Price, Wealth Effect, Transmission Mechanism, Substitution Effect
JOURNAL NAME:
Modern Economy,
Vol.10 No.7,
July
25,
2019
ABSTRACT: After the global financial crisis, more and more
research at home and abroad have focused on the impact of the real estate
market on consumer spending. This paper reviews the research results of domestic
and foreign scholars on the wealth effect of real estate, and finds that no
matter based on macro or micro data, the relevant domestic research has not
given a more consistent conclusion that the wealth effect of the real estate
market. Some people hold that the housing wealth effect is positive in China,
while others hold that the housing wealth effect is negative in China. This
paper sorts out those and tends to support the conclusion that the wealth
effect of China’s real estate market is negative. Then, based on the
perspective of transmission mechanism, this paper makes a reasonable
explanation, and finally puts forward some corresponding feasible policy
recommendations to promote the positive wealth effect of the real estate
market.