Abstract: This paper constructs a New Keynesian dynamic stochastic general equilibrium model that includes the two markets: a real estate market and an ordinary consumer market, which is to be calibrated according to the structural parameters gained in the researches both at home and abroad of the theories and experiences of Chinese economy. On the basis of this calibration, this paper studies the effect of exogenous technology impact, preference shock, monetary policy shock and short-time one-off housing price addition impact on such variables as the ordinary consumer goods output, housing output, inflation, housing inflation, real wages and unemployment. It is found in the study that with respect to the technical impact and the preference shock, monetary policy shock and the impact of one-off housing price addition have a greater effect and longer duration on the main macroeconomic variables. Therefore, to stabilize monetary policy and to control the housing prices addition can weaken the harmful impact on the macroeconomic cycle.

Key words: housing price fluctuations; monetary policy; economic cycle; DSGE model