Study on the different Impact of Money on different Prices in terms of the Ratio of Asset Securitization and Ratio of Non
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| Title | Study on the different Impact of Money on different Prices in terms of the Ratio of Asset Securitization and Ratio of Non
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| Author | Li Jian and Deng Ying |
| Organization | School of Finance, Central University of Finance and Economics；People’s Bank of China |
| Email | islijian@vip.sina.com；dengreta@126.com |
| Key Words | Money Structure; Ratio of Asset Securitization; Ratio of Non-materialization; Housing Prices, Commodity Prices |
| Abstract | This paper started from the characteristics of the asset inflation and studied the reason why the housing prices and the commodity prices did not increase simultaneously under the monetary impact based on the view of money structure. It depicted the temporal dimensionality and spatial dimensionality of money structure, constructed two indices such as ratio of capitalization of money and ratio of non-substantiation of money, and made an empirical analysis of the nonlinear relation among the money structure, housing prices and commodity prices in China using the threshold model and VAR model. According to the study, the money stock has different impact on every kind of price under different money structure. On the temporal dimensionality, it showed that higher ratio of capitalization of money pushed up the housing prices remarkably, whereas lower ratio of capitalization of money made the commodity prices increase evidently. On the spatial dimensionality, increase in the ratio of non-substantiation of money led to quicker response of housing prices than that of the commodity prices and transmitted the asset inflation to the inflation in substantial economy. Therefore, this paper presented such suggestions as paying attention to the changes of money structure, regarding the ratio of capitalization of money as a supervisory index of monetary policy, and prevented the asset inflation from transforming into inflation in substantial economy. |
| Serial Number | WP892 |
| Time | 2015-07-07 |
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