Open AccessInternational Real Estate Review
Author(s) -
Hongyu Liu,
Yun W. Park,
Siqi Zheng
Publication year - 2002
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100036
Subject(s) - economics , investment (military) , real estate , granger causality , gross private domestic investment , economic expansion , monetary economics , macroeconomics , return on investment , open ended investment company , finance , production (economics) , econometrics , politics , political science , law
The importance of housing investment in the national economy and its rapid growth have become distinct characteristics of the Chinese economy in recent years. However, at the same time, there is a concern that the economic growth heavily dependent on housing investment may compromise the stability and the health of the national economy. Using Granger causality analysis, this paper examines the interaction between housing investment and economic growth as well as that between non-housing investment and economic growth. We find evidence that housing investment has a stronger short run effect on economic growth than non-housing investment. We also find that housing investment has a long run effect on economic growth while economic growth has a log run effect on both housing and non-housing investment. Our findings suggest that housing investment is an important factor for the short-term fluctuations of economic growth, with its growth stimulating the economic growth and its slumps leading to downside fluctuations.