A Marco-Econometric Research on Housing and Stock Market in Taiwan
Date Issued
2011
Date
2011
Author(s)
Chen, Yi-Hsuan
Abstract
The heavy measures recently to enhance the soundness of the housing market trigger the imperative to study the relationship between housing prices and macroeconomy. This paper applies statistical regression, time series methods to construct Taiwan’s macroeconometric model, which has 75 equations and 99 variables, and also includes 44 structural equations and 31 definition formulas. We use static forecast and compare in-the-sample forecast outcome to verify model’s forecastability and trustworthiness.
Two scenarios analysis, including the fluctuation from housing loan interest rates and stock price, are considered. It can be inferred that both the decline of interest rates and the increase of stock price have positive effects on real variables. This situation will ignite thriving economy and appreciation in NTD. The results also indicate that the government reacts to increasing housing prices by imposing higher taxes and raising interest rates. The positive relationship between housing and stock prices reconfirm the results in other literature.
Subjects
housing price
stock price
Type
thesis
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