The non-linear effects of monetary policy on real estate prices based on the STR model

There are no unified answers on the relationship between monetary policy and real estate prices. The existing literatures that about this issue based on linear framework, and this paper researches about the effects of monetary policy on real estate prices through establishing nonlinear models. This paper selects monthly data from February 1998 to May 2013 and chooses the real estate prices as conversion variable to explore the impact of monetary policy on real estate prices in the real estate market downturn and boom. The results showed that a) the model of money supply can explain more than the model of interest rates as the proxy variable of monetary policy, b) monetary policy lags behind the policy itself, c) nonlinear model can better explain the impact of monetary policy on real estate prices, d) monetary policy has greater impact than in the real estate market downturn in boom.