The change of housing price from the monetary policy

• Main Authors: Li, Chia Chen, 黎佳貞
• Other Authors: Lin, Tsoyu Calvin
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/8z5464

碩士 === 國立政治大學 === 地政研究所 === 100 === Taiwan’s Central Bank implemented loose monetary policy through reducing interest rate since 2000 to stimulate economy growth. In the mean time, housing prices rose rapidly since low interest rates encourage housing investment. We therefore hypothesize that the loose monetary policy caused the surge of housing prices. Previous studies have discussed the relationship between interest rates and housing prices, they usually ignored the rationale behind the interest rate. This paper employs the Johnson cointegration test, Granger causality test and Taylor’s Rule as a benchmark to examine the monetary policy from 1991 to 2010 in Taiwan. We found the existence of two-way, long-term relationship between the monetary policy and the housing price. Results also show that there exists excessively loose monetary policy from 2001 to 2005 using Taylor’s Rule as the benchmark. The loose monetary policy caused the housing price to rise from 2003, and the persisting lower interest rates led the surge of housing prices.