The Dynamic Relationship among Bank Credit, House Prices and Carbon Dioxide Emissions in China

Guangyang Chen; Kai Dong; Shaonan Wang; Xiuli Du; Ronghua Zhou; Zhongwei Yang

doi:10.3390/ijerph191610428

The Dynamic Relationship among Bank Credit, House Prices and Carbon Dioxide Emissions in China

Int J Environ Res Public Health. 2022 Aug 21;19(16):10428. doi: 10.3390/ijerph191610428.

Authors

Guangyang Chen¹, Kai Dong¹, Shaonan Wang², Xiuli Du³, Ronghua Zhou⁴, Zhongwei Yang¹

Affiliations

¹ Business School, Nanjing Xiaozhuang University, Nanjing 211171, China.
² Department of Agriculture and Applied Economics, University of Georgia, Conner Hall, 147 Cedar St., Athens, GA 30602, USA.
³ School of Finance, Nanjing University of Finance and Economics, Nanjing 210023, China.
⁴ School of Social Sciences and Humanities, University College Sedaya International, Cheras 56000, Malaysia.

Abstract

This paper explores the dynamic relationship among bank credit, house prices and carbon dioxide emissions in China by systematically analyzing related data from January 2000 to December 2019 with the help of the time-varying parameter vector autoregression with stochastic volatility (TVP-SV-VAR) model and the Bayesian DCC-GARCH model. Empirical results show the expansion of bank credit significantly drives up house prices and increases carbon dioxide emissions in mosttimes. The rise in house prices inhibits the expansion of bank credit but increases carbon dioxide emissions and aggravates environment pollution, and that the increase in carbon dioxide is helpful to stimulate bank credit expansion and house price rise. In addition, bank credit and house prices are most relevant, followed by bank credit and carbon dioxide emissions, then by house prices and carbon dioxide emissions. Therefore, we believe that in order to stabilize skyrocketing house prices, restrain carbon dioxide emissions, and secure a stable and healthy macro-economy, the government should strengthen management of bank credit, and effectively control its total volume.

Keywords: bank credit; carbon dioxide emissions; dynamic relationship; house price.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Bayes Theorem
Carbon Dioxide* / analysis
China
Economic Development
Environmental Pollution* / analysis

Substances

Carbon Dioxide

Grants and funding

General project of National Social Science Foundation of China “Research on the conflict between stability and effectiveness of China’s stock market under government intervention and Countermeasures” (Project No.: 20BJY250) (National Social Science Foundation Committee); The key project of Jiangsu Social Science Fund “Research on policy speculation and stock market dynamics under the constraint of limited attention of investors” (Project No.: 19EYA001); (Jiangsu Social Science Planning Office) The youth project of Jiangsu Social Science Foundation “Research on the inefficient allocation of rural financial resources in Jiangsu” (Project No.: 20EYC013) (Jiangsu Social Science Planning Office); The youth project of Jiangsu Provincial Social Science Foundation “Research on the impact of Jiangsu residents’ leverage on consumption expenditure” (Project No.: 21EYC003) (Jiangsu Social Science Planning Office).