Housing market dynamics in China: Findings from an estimated DSGE model

Chi Yung NG*

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    27 Citations (Scopus)


    We use an estimated dynamic stochastic general equilibrium model to study housing market fluctuations in China. More than one-third of the volatility of housing prices is driven by housing preference shocks. The volatility of residential investment is mainly driven by housing technology shocks with more than one-half variance contribution. Monetary shocks explain 12-32% of variance in housing prices and residential investments. However, the contribution of monetary factors appears more important in the 1990s and less important in the 2000s. We find that two observables with "Chinese characteristics" capture part of the housing preference shocks. The shocks are positively related to the sex ratio and negatively related to the equity market index.

    Original languageEnglish
    Pages (from-to)26-40
    Number of pages15
    JournalJournal of Housing Economics
    Publication statusPublished - 2015

    Scopus Subject Areas

    • Economics and Econometrics

    User-Defined Keywords

    • China
    • DSGE models
    • Housing market
    • Housing prices
    • Residential investment


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