THE MONETARY POLICY, THE REAL ESTATE MARKET, AND THE STRUCTURAL EVOLUTION OF CHINA’S MACROECONOMIC FLUCTUATIONS ACROSS CRISIS PERIODS (2008-2024)
Анотація
Since 2008, China has faced several major economic shocks, from the global financial crisis to
the buildup of domestic financial risks after 2012, and more recently the combined effects of the
pandemic and the real estate downturn starting in 2020. These events have sparked questions about
whether China’s macroeconomic transmission mechanisms still operate reliably or whether their
internal structure has shifted under different crises. Rising policy uncertainty tends to increase
fluctuations in real estate prices and undermines the stability of monetary policy [1]. Studying how
these mechanisms change over time is essential for improving economic forecasts and making policy
interventions more effective.
This study examines how China’s macroeconomic transmission structure has evolved across
three crisis periods from 2008 to 2024. It uses annual data and a VAR model to explore the
interactions among M2 money supply (M2), loan interest rates (R), house prices (HP), GDP,
household final consumption expenditure (CE), and fixed asset investment (V). Granger causality
tests, impulse response analysis, and variance decomposition compare the full sample with three
distinct phases: the 2008 global financial crisis, the 2012–2019 rebalancing period, and
the 2020–2024 period, which experienced the combined impact of the pandemic and the real estate
market downturn (fig. 1).
The empirical results reveal clear changes in China’s transmission structure. During the 2008
crisis, monetary expansion and the real estate sector played central roles in stabilizing the economy.
From 2012 to 2019, the effect of monetary policy weakened, and the economy gradually rebalanced,
with household consumption gaining importance. After 2020, the transmission pattern shifted again:
quantitative monetary tools regained influence, the real estate sector’s role dropped sharply [3], and
consumption became a main driver of economic fluctuations. Throughout all periods, the interest rate
channel stayed relatively weak, reflecting persistent structural rigidities, while fixed asset investment
consistently responded to shocks rather than driving them
