tailieunhanh - The Interaction between Housing Investment and Economic Growth in China

The Wharton investment courses are designed to meet the needs of multiemployer and public plan trustees, administrators and staff, human resources and benefits professionals, corporate officers and executives, finance personnel, investment professionals and fiduciaries who represent both defined benefit and defined contribution plans. Representatives of funds from various types, sizes and geographic areas, including Canada, will benefit from the courses. The courses are independent units that may be completed in any sequence, although we strongly encourage individuals with little investment course experience to complete the Portfolio Concepts and Management course as a foundation prior to attending the Advanced Investments Management. | 40 Liu Park and Zheng International Real Estate Review 2002 Vol. 5 No. 1 pp. 40 - 60 The Interaction between Housing Investment and Economic Growth in China Liu Hongyu Institute of Real Estate Studies Tsinghua University Beijing 100084 China or liuhy@ Yun W. Park College of Business and Economics California State University 800 N. State College Blvd. Fullerton CA 92834-6848 or yunpark@ Zheng Siqi Institute of Real Estate Studies Tsinghua University Beijing 100084 China or zhengsq00@ 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. Keywords Economic growth housing investment non-housing investment Granger causality cointegration error correction model The Interaction between Housing Investment and Economic Growth 41 Introduction The high growth rate the Chinese economy has achieved in recent years is unusual especially in view of the generally weak economy around the world. The Chinese government has consistently emphasized the role of aggregate investment in .