Journal of Business & Economic Policy

An Empirical Study of the Relationship between Money Supply and House Price: Taking Anhui Province as an Example
Wang Ying Xin

Abstract
Since the housing reform in 1998, the real estate market in various regions of China has begun to flourish, and a series of problems caused by the rise of house prices have become the focus of attention of the state and the government. The impact of money supply growth on the real estate market should not be underestimated. In order to understand the relationship between money supply and house prices, this paper takes Anhui Province as an example to study the influence of the change of generalized money supply (M2) on real estate prices. The results show that the money supply has a positive effect on the housing prices, and there is a long-term equilibrium relationship between the two. According to the results, the paper puts forward some policy suggestions on how to rationally regulate the money supply of real estate industry and perfect the bank credit policy.

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