In the morning of June 15, Associate Professor Ning Feng from Nan Kai University held a seminar entitled " Do Expectation and External Shocks matter for Housing Business Cycles in China: evidence from an estimated open-economy DSGE model ". Faculty members from different departments of Nanjing Audit University attended the seminar.
Dr. Feng ‘s research studies the sources of fluctuations in the housing market of China. He firstly introduced two stylist features of Chinese real estate market: high volatility of the price; and high correlation between property prices and economic growth as well as inflation. Dr Feng and his coauthors construct an estimated open-economy DSGE model and the macroeconomic time-series data of China to assess the quantitative impacts of both contemporaneous and expectation shocks to domestic and external fundamentals on housing market dynamics. Their study shows that cyclical fluctuations in housing prices and housing investment are mainly driven by contemporaneous shocks related to foreign housing preference and terms of trade, and by expectation shocks related to domestic consumption-goods technology, housing preference and terms of trade. Moreover, they find the spillover effects of external shocks on housing prices are remarkably larger than that of domestic shocks.
Through this lecture, faculty members and students have a better understanding of the implication of the open-economy DSGE model in examining fluctuations in housing prices.
