Author(s)

Yang Yunyan, Li Zenglai

Corresponding Author

Yang Yunyan

Abstract

China's shadow banking has gradually become an important way of social financing, and its scale has been continuously expanded and its influence has been deepening. The unique operating mechanism of shadow banking makes it easy to evade the national credit control policy and enter the real estate market in a hidden way. The high profitability of the shadow banking provides a continuous supply of credit. This paper starts with measuring the scale of the shadow banking system in Tongling City, selects the annual data of Tongling City (time year is from 2002 to 2017), establishes the vector autoregressive (VAR) model, draws on the predecessor model, obtains the scale of the shadow banking, and changes it with the price of the house. The relationship between them was deeply understood. Through analysis, it is found that the interest rate change of the shadow banking system has a long-term cointegration relationship with the housing prices in Tongling City, and the absolute growth of the absolute scale of the shadow banking has in turn pushed up the housing prices. Therefore, we should help regulate the housing prices in Tongling from the perspective of increasing the regulation of interest rates and the scale of shadow banking.

Keywords

Shadow banking scale, Housing price, Interest rate, Vector autoregressive model