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The influence of house prices on economic growth and consumption
Lin, Yu Lun
Lin, Tsoyu Calvin
Hsu, Shih Hsun
Lin, Yu Lun
|Issue Date: ||2017-05-01 11:26:09 (UTC+8)|
The soaring housing price in Taiwan has deteriorated the home affordability of citizens in Taiwan, especially after the Quantitative Easing (QE) monetary policy after the subprime crisis as well as in the low tax environment. For example, the Price-to-Income (PTI) Ratio in Taipei City reached 16 in 2014 is higher than most cities in the world. The pressure of mortgage payment for households seems to crowd out the consumption capability and therefore the economic growth. To discover the influence of housing prices on consumption and economy, we employ the Vector Autoregression Model (VAR) for empirical analysis. Results show that consumption in Taiwan is highly and positively influenced by the stock price index and the lagging consumer expense, whereas interest rate plays a minimal role. On the other hand, rising house prices have negative effects on consumption. Through the analysis of impulse response function, we discover that housing index has a significant impact on itself with long period effect, and secondly on the consumption. We also find that high housing price has a crowding-out effect on consumption and in turn results in the sluggish economic growth in Taiwan. The findings of this study provide the government with a policy direction in deciding whether to stimulate or control housing prices for long-term housing affordability and economic sustainability.
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|Source URI: ||http://thesis.lib.nccu.edu.tw/record/#G1022570161|
|Data Type: ||thesis|
|Appears in Collections:||[地政學系] 學位論文|
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