This paper examines the characteristics of housing price cycles in East Asia and Greater China for the period from 2001:Q1 to 2010:Q1. We find that housing price cycles in East Asia (China, Hong Kong, Japan, Korea, Singapore, and Taiwan) are accounted for mainly by region-specific and country-specific factors. East Asia's regional housing price cycles co-move strongly with the world housing price cycle in the long run, but relatively weak co-movement is found in the short run. Housing cycles in Greater China (China, Hong Kong, and Taiwan) and Singapore co-move with Northeast Asia's regional housing price cycle in the long run, but this tendency fails to show up in the short run. Both domestic monetary and business-cycle effects are important in accounting for housing price cycles in China, Hong Kong, Japan, and Taiwan, while credit supply is crucial for Korea. Fiscal policy does not play a significant role. We find empirical evidence of a China effect in housing price cycles in Hong Kong, Taiwan, and Singapore.

As a regional credit mechanism, the Credit Guarantee Investment Facility (CGIF) has been developed in East Asia, and its first credit guarantee is on the cards in 2012. This paper analyzes the potential macroeconomic benefits from CGIF on the basis of simulated scenarios using an ASEAN+3 version of the Global Integrated Monetary and Fiscal model. The results show that even if CGIF enhances several, but not all, of the ASEAN+3 members' credit fundamentals, it helps increase not only the credit-beneficiary countries' investment and real GDP, but also those of the other ASEAN+3 countries.