Impacts of monetary policies on the real estate bubble in Hanoi, Vietnam
The development of the real estate market always goes hand in hand with the fluctuation of the economy. In recent years, this market has experienced many recessions and «freezes» associated with the appearance of a real estate bubble. To approach this issue, this paper studies and gives an overview...
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LLC "CPC "Business Perspectives"
2023-03-01
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| Series: | Investment Management & Financial Innovations |
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| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/17825/IMFI_2023_01_Le.pdf |
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| author | Phuong Lan Le Thu Uyen Nguyen Thi Thanh Van Pham Thi Huong Pham Sy Bin Nguyen |
| author_facet | Phuong Lan Le Thu Uyen Nguyen Thi Thanh Van Pham Thi Huong Pham Sy Bin Nguyen |
| author_sort | Phuong Lan Le |
| collection | DOAJ |
| description | The development of the real estate market always goes hand in hand with the fluctuation of the economy. In recent years, this market has experienced many recessions and «freezes» associated with the appearance of a real estate bubble. To approach this issue, this paper studies and gives an overview of the real estate bubble and the impact of monetary policies on the real estate bubble in Vietnam. This paper’s purpose is to identify and measure the influence of monetary policies, including interest rates, credit and money supply, on the real estate bubble in Ha Noi. The vector autoregression model (VAR) is used to test the interaction of the variables in the model. Dickey-Fuller test (DF) is applied to determine the stationarity of the variables, while the Akaike information criterion (AIC), Likelihood Ratio (LR), Final prediction error (FPE), Hannan-Quinn information criterion (HQ) and Schwarz criterion (SC) are used to find optimal lag of the model; then Granger causality test is utilized to determine the two-way correlation between variables. The results showed that the real estate bubble reacted quickly to shocks from macroeconomic factors representing the monetary policy, consisting of interbank interest rates, credit growth, and money supply growth. Thus, it is concluded that monetary policy is not only the cause of formation, but also one of the effective solutions to deflate the real estate bubble.
AcknowledgmentThis research is funded by Vietnam Ministry of Education and Training (MOET) under grant number [B2022-NTH-03]. |
| first_indexed | 2024-04-09T23:36:13Z |
| format | Article |
| id | doaj.art-6f2af5a4d658440db041ab694200608f |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2024-04-09T23:36:13Z |
| publishDate | 2023-03-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-6f2af5a4d658440db041ab694200608f2023-03-20T06:23:49ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582023-03-0120122823710.21511/imfi.20(1).2023.2017825Impacts of monetary policies on the real estate bubble in Hanoi, VietnamPhuong Lan Le0https://orcid.org/0000-0001-8860-7672Thu Uyen Nguyen1https://orcid.org/0009-0009-3277-3415Thi Thanh Van Pham2Thi Huong Pham3https://orcid.org/0000-0003-4130-1734Sy Bin Nguyen4Ph.D., Lecturer, Faculty of Banking and Finance, Foreign Trade UniversityStudent, Faculty of Banking and Finance, Foreign Trade University, Vietnam, Foreign Trade UniversityStudent, Faculty of Banking and Finance, Foreign Trade University, Vietnam, Foreign Trade UniversityStudent, Faculty of Banking and Finance, Foreign Trade University, Vietnam, Foreign Trade UniversityStudent, Faculty of Banking and Finance, Foreign Trade University, Vietnam, Foreign Trade UniversityThe development of the real estate market always goes hand in hand with the fluctuation of the economy. In recent years, this market has experienced many recessions and «freezes» associated with the appearance of a real estate bubble. To approach this issue, this paper studies and gives an overview of the real estate bubble and the impact of monetary policies on the real estate bubble in Vietnam. This paper’s purpose is to identify and measure the influence of monetary policies, including interest rates, credit and money supply, on the real estate bubble in Ha Noi. The vector autoregression model (VAR) is used to test the interaction of the variables in the model. Dickey-Fuller test (DF) is applied to determine the stationarity of the variables, while the Akaike information criterion (AIC), Likelihood Ratio (LR), Final prediction error (FPE), Hannan-Quinn information criterion (HQ) and Schwarz criterion (SC) are used to find optimal lag of the model; then Granger causality test is utilized to determine the two-way correlation between variables. The results showed that the real estate bubble reacted quickly to shocks from macroeconomic factors representing the monetary policy, consisting of interbank interest rates, credit growth, and money supply growth. Thus, it is concluded that monetary policy is not only the cause of formation, but also one of the effective solutions to deflate the real estate bubble. AcknowledgmentThis research is funded by Vietnam Ministry of Education and Training (MOET) under grant number [B2022-NTH-03].https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/17825/IMFI_2023_01_Le.pdfcreditHanoi real estate bubbleinterest ratemoney supplyVietnamese monetary policy |
| spellingShingle | Phuong Lan Le Thu Uyen Nguyen Thi Thanh Van Pham Thi Huong Pham Sy Bin Nguyen Impacts of monetary policies on the real estate bubble in Hanoi, Vietnam Investment Management & Financial Innovations credit Hanoi real estate bubble interest rate money supply Vietnamese monetary policy |
| title | Impacts of monetary policies on the real estate bubble in Hanoi, Vietnam |
| title_full | Impacts of monetary policies on the real estate bubble in Hanoi, Vietnam |
| title_fullStr | Impacts of monetary policies on the real estate bubble in Hanoi, Vietnam |
| title_full_unstemmed | Impacts of monetary policies on the real estate bubble in Hanoi, Vietnam |
| title_short | Impacts of monetary policies on the real estate bubble in Hanoi, Vietnam |
| title_sort | impacts of monetary policies on the real estate bubble in hanoi vietnam |
| topic | credit Hanoi real estate bubble interest rate money supply Vietnamese monetary policy |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/17825/IMFI_2023_01_Le.pdf |
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