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Can a Housing Boom Lead to Rent Inflation?
Honglin Wang, Fan Yu, Yinggang Zhou, Aug 24, 2018The housing boom and bust cycle has called attention to the volatility of housing prices and its impact on other markets. We challenge the conventional wisdom that housing prices are the present value of future rents and show that housing price uncertainty can affect household property investments, which in turn affect rent. Using data from Hong Kong and mainland China, we find a significant effect of housing price on rent and draw important implications for monetary and macro-prudential policies.
The Long-term Persistence of Informal Finance in China
Jinyan Hu, Chicheng Ma, Bo Zhang, Jan 24, 2018By using data on 137 counties in north China, we find that the density of financial institutions (Qianzhuang and Diandang) in the late Qing period has a significant positive effect on the number and total assets of small loan companies, a dominant institution of informal finance today. The persistent effect of historical financial institutions can be explained by Confucian culture, which instills integrity, lineage solidarity and acquaintance networks.
The Impact of the China Tire Safeguard
Sunghoon Chung, Joonhyung Lee, Oct 23, 2019This column evaluates the impact of the China tire safeguard on the US tire industry. Contrary to claims made by the US government, we find that total employment and average wages in the tire industry were unaffected by the safeguard. This result is not surprising as we find that Chinese tires have been completely diverted to other exporting countries due to the strong presence of multinational corporations in the world tire market. On the other hand, US domestic tire prices increased by up to 10% during the safeguard period...
When History Matters Little: Political Hierarchy and Regional Development in China, AD 1000-2000
Ying Bai, Ruixue Jia, Jan 09, 2019Regime changes in China between AD 1000 and 2000 systematically altered the relative importance of different regions in the political hierarchy of that time. The evolution of Chinese provincial capitals and economic activities during this period throws light on how political factors shape economic geography. Employing a panel dataset...
The Collateral Channel of Monetary Policy: Evidence from China
Hanming Fang, Yongqin Wang, Xian Wu, May 13, 2020As a quasi-natural experiment to estimate the causal impact of the collateral-based unconventional monetary policy, we exploit the expansion of the collateral for the Medium-Term Lending Facility (MLF) in the interbank bond market on June 1, 2018 by the People’s Bank of China. We also consider that many bonds are dual-listed in a largely segmented exchange market. We find that the policy reduced the spreads of the newly collateralizable, dual-listed bonds in the treatment...
