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Abstract
The Four Trillion Renminbi Stimulus Package is one of the most important measures introduced by the Chinese government to deal with the subprime mortgage crisis and stabilize the real estate market. This study categorized 62 prefecture-level cities into six types of real estate markets using a hierarchical clustering method, and built a global vector autoregressive model (GVAR) model to compare and analyze the impact of the stimulus package on these different real estate markets using data covering the period from February 2006 to December 2012. According to the findings, before the stimulus package, monetary policy affected real estate prices and investment as expected across all regions, and any variations were not significant. Afterwards, however, the impact of monetary policy on both prices and investment exhibited heterogeneity. Moreover, the regulatory effect of monetary policy was no longer significant.