Date of Award


Degree Name

Doctor of Philosophy



First Advisor

Dr. C. James Hueng

Second Advisor

Dr. Wei-Chiao Huang

Third Advisor

Dr. Kevin Corder


monetary policy, China's economy, housing price, stock market


China has experienced high speed of economic growth, trying to catch up with the developed countries. Monetary policy has played a more and more important role in China. This dissertation studies the impacts of China's monetary policy on China's housing market, stock market, and China's economic growth.

The first essay examines macroeconomic determinants of China's housing price by constructing a VAR model. Granger Causality tests, impulse response functions and variance decompositions are used to analyze the impacts of macroeconomic factors on the housing price. By using the monthly data from 2005 to 2015, the results show that a contractionary monetary policy will cause the growth rate of housing prices to decline in China. However, output growth doesn't play an important role in housing price in China. Besides, it will take about half a year for a contractionary monetary policy to start to influence the housing prices and the effect will last for approximate two years after the policy is initially implemented.

The second essay conducts empirical analysis of the influence of economy growth and monetary policy on the stock index in China. From 2008 to 2017, China's GDP growth remained above 6% and China surpassed Japan to become the world's second largest economy in 2011. However, after the financial crisis in 2007 China's stock market remained weak and stock index fluctuated up and down at the level of 2008. Some scholars believe that the downturn of stock market in China is the result of a slowdown in China's economy. And some argue that it can be caused by the government's intervention to stock market. This paper examines the determinant of China's stock index by constructing a VAR model. The results of the empirical study show that none of the real economic variables is a cause of the stock index. And monetary policy doesn't have significant effect on the stock market in China.

The third essay employs a Dynamic Stochastic General Equilibrium (DSGE) model with Bayesian approach to model the China economy and to analyze the impacts of monetary policy shocks. The data are on a quarterly basis and from 1992 to 2014. Based on the results of the posterior distributions and impulse response functions, I find that the monetary policy shock does have significant effects on China's output and inflation. However, based on the results of variance decomposition I find that the monetary policy shocks didn't play significant role in China's business cycle. Hence, the monetary policy might not be the major driver for China's economic growth. The reason of the ineffectiveness of China's interest rate policy might be the imperfect financial market and interest rate control in China.

Access Setting

Dissertation-Open Access