An Examination of the Effects of Monetary Policy on the Housing Market and Variations in Asset Prices

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With the deepening development of economic globalization, the world has experienced a series of sharp fluctuations in macro-economy. These fluctuations are manifested in the abnormal fluctuations of asset prices and the long-term downturn of stocks, real estate and other industries. Historically, events such as the bursting of Japan's economic bubble in the early 1990s, which led to the collapse of its long-term credit system and the "Heisei Great Depression," and the subprime mortgage crisis that triggered the global financial panic in 2008, have had a profound impact on global financial markets. In this context, how to effectively prevent and cope with the challenges brought by monetary policy macro-control has become the primary task of current research. By studying the sensitivity of monetary policy and asset price, it can effectively predict the crisis and make timely adjustment of related policies. Based on the perspective of financial economics, this paper adopts a two-way analysis combining theoretical analysis and empirical analysis. Specifically, this paper makes an in-depth discussion and analysis by analyzing the annual financial report in which real estate accounts for a relatively large share of local government GDP, combined with the changes in monetary policy.