Investigating the co-relationship between housing price and inflation by assembling wavelet based time-frequency analysis
Jiamin Wang, Henglang Xie · 2nd International Conference on Applied Mathematics, Modelling, and Intelligent Computing (CAMMIC 2022) · 2022
The purpose of this paper is to use the wavelet transform context structures based on Granger causality analysis to investigate the correlation between housing prices and inflations in first-tier cities, namely Beijing, Shanghai, Guangzhou and Shenzhen. Wavelet analysis can be used for filtering, noise removal, multi-resolution time-frequency analysis, and other functions, especially for analyzing non-stationary signals. Results indicate that the relationship is generally positive but changes over time, displaying low to high-frequency cycles. Moreover, most of the situations that show a correlation between housing prices and inflations are that housing prices led inflations, which illustrate that housing prices are crucial to the economy.