Principal Investigator Robert Townsend
Project Website https://stl.mit.edu/project/real-estate-industry-financial-markets-and-economic…
We propose to study the real estate sector in China, as integrated with the financial sector. Likewise, in thinking about local and regional economies, as well as national economic development, the real estate sector should be compared and contrasted to manufacturing, agriculture, services, etc., and studied as interacting with those other sectors. In particular, land and real estate prices may be fueled by development policies, e.g., credit from state banks for infrastructure and public works, and some of this may be creating distortions that draw too much investment and resources from other sectors. Finally, the economy as an integrated whole is thus also subject to financial stability concerns. The long term goal of this project is to thoroughly understand the Chinese economy, help design and make recommendations for a balanced, resilient financial system, and hence to foster responsible entrepreneurship.
Microeconomics and macroeconomics are tied together in this project, and we plan to construct models and use data to parse this out. We need however to assemble the data first, in this first year, along with preliminary statistical analysis. These activities naturally emphasize as well the geography and interdisciplinary aspects. Tiyan Shen, Professor in School of Government, Peking University and Jiafeng Gu, Associate Professor in Institute of Social Science Survey, Peking University will collaborate with us.
To explore the above research questions, and to facilitate other studies about the real estate industry in China, a database archive and data visualization tools will be built. This comprehensive database of geo-referenced data would greatly ease the incorporation and integration of data from different sectors and different regions.
We will acquire and digitalize, at the very least, the following datasets: 1) CREIS Chinese Real Estate Macro Database; 2) China city statistical yearbook; and, 3) China Census data. Other data on firms and households are mentioned, especially as they tie to other sectors and to the financial system.
The intention for the long run is to develop a series of research projects that study the connection of the real estate industry with the financial system, and the Chinese macro economy generally, and then conduct relevant policy analyses, based on the data archive described above.