Development Housingprices Function to Narrow the Income Gap and to Overcome the Economic Crisis
Jin-Xiaoming
Zhejiang Dongfang Vocational and Technical College Wenzhou City Zhejiang Province PRC (Postal Codes 325011）
Abstract: The Coefficient of Investment and Purchase（CIP）= (0,4] is also the ratio of Hp-to-Income, that is, Somewhere an average housing prices (Hp) equivalent to CIP[1] is multiplied by an average wages of a month(Wa) for all the social local inhabitant.Therefore, HP can be crude assessment nearly three times per capita monthly income, then Hp can be broken down into three Hp/3 of its composition. Along with the development of productivity and land-output ratio, GDP, Hp should be growth.Based on the human living together in the global village and scientific-technological productive created by the human , GDP growing should be shared by all, The first Hp/3 is for land compensation and subsidy "Agriculture" to narrow the gap between workers and peasants, the other Hp/3 is used to replenish the social security to reduce the gap between rich and poor, and the remaining Hp/3 is for cost and profit for the developers. It is thus clear that Hp has the function regulating and controlling as Hp by decomposition into three Hp/3,the moderately high Hp within (0,4] is the reflection of land-output ratio rising continuously,is also beneficial to narrowing the income gap,promoting the GDP/Wage steady growth in improving people's livelihood and overcoming an economic crisis thereby.
Key words: Hp function; Hp Law theory; CIP = (0,4]; Hp/3; "Three" gaps; Economic crisis; GDP / wages
1. The connotation of Hp
In clothing, food, shelter,transportation and supplies, settle down is not only scale consumption but the families investment of the most closeness relationship with the land. Settle down for the purpose of development of technology productivity, its consumption prices namely Hp reflects the land productivity.Due to human society evolution process has been and will be through the wilderness, countryside, city, the garden and public network and so on stage, and at now stage, urbanization is basically the national investment to plan the layout of traffic grid, the builder fills the buildings, plus all kinds of industries constitute the source of GDP ... ... in the process of the allocation and redistribution of GDP, will produce all kinds of political and economic problems. Political and economic problems can be summarized as efficiency and equity. In the three relations of social equity, quality and efficiency, economic development (GDP), to take care of efficiency and equity well, GDP will naturally develop. Fair problem embodied in "three" gaps, "three" gap mainly come from the different of land productivity and the interests unbalance of two big workers and peasants group,this interests unbalance was caused by the patent and brand monopoly pricing system of inclination cities and towns,second from regional disparity and urban-rural divide formed by logistics valley, the third is unfair distribution based on the evil of human nature, the gap between poor and rich caused by the measuring technological backwardness of distribution according to ones performance. It is no exaggeration to say that political and economic problems can be assembled to the real estate economy.
In "three" gap, the gap between urban-rural and workers-peasants is the main issues, house purchasing investment coefficient CIP = (0,4] [1] was derived from balancing the groups interest between urban-rural and workers-peasants. Based real estate investment, on one hand Hp control formula was derived by CIP, on the other hand Hp is non-ordinary commodity prices, CIP = (0,4] may prove that Hp equivalent to three times average monthly earnings in international popular is reasonable. From this we get two definitions to define Hp: First, Somewhere Hp equivalent to CIP[1] is multiplied by Wa for all the social local inhabitant; Second, Hp can be decomposed into three Hp / 3, to subsidize the "three rural" and narrow the gap between poor and rich.
By the connotational definition of housing prices formula :Hp = CIP × Wa.We know that CIP is the basic price theory come from the purchasing power ,and can reflect the coefficient of Hp-to-Income. 3 is located in the CIP = (0,4] interval,to demonstrate the rapid formula is correct that Hp is equal to average monthly earnings three times, therefore, Hp can be broken down into three Hp/3 of the composition. Such,we may make another Hp's function definition: Hp = (Hp/3) × 3, The first Hp/3 is for cost and profit for the developers, the second Hp/3 is for land compensation and subsidy "Agriculture", the third Hp/3 is used to replenish the social security. The two definitions can give Hp to reduce "three" gap function, indicating that Hp beyond the theory of value theory is two-thirds higher than the general price level. This is because Hp is different from general commodity prices, real estate is real estate, with consumption and investment duality.
In fact, Hp is estimated to be 4 times the Wa or 3 times the average monthly income ,because individual income usually include capital income, assets and other income ,more than Wa.
2. The law system of Hp
All along, People blindly discuss the high or low of Hp , Thus the government to regulate prices are also putschism. We determine a Hp level ,first to understand the Hp concept, second to grasp the Hp law.
(A) Average real estate prices (Hp)is always continually rising accompanied by technological development and the social evolution
There are three signs of social evolution:First,the progress of scientific-technological and the development of productive ; second,Land appreciation and a rise in prices;third，Shooting Quantum(SQ) [2](currency sign abstraction of incorporating the ability and the desire into an integral whole) large amount of release, GDP growth and people's livelihood improvement.In other words, the process of social development are the process of science -technology development, inflated currency, the appreciation of non-renewable resources (such as land) and labor.
Now, the network speed being accelerated, trains, aircraft being accelerated, transport and logistics facilities being improved.This marks that the more developed science-technology is,the quicker society working,the earth is relatively increasingly small,land is thereby more and more costful.Under currency sign's gold content is basically invariable condition,social development is the process of SQ large amount of release(manifested as the central bank issuing the currency),GDP growth, wage increase and Hp rising. Period, Hp,wages/GDP should be coaction elevated.
(B) Hp ,GDP,Wa are direct proportion relation
After solving food and clothing, the well-off living of shelter-transportation is just the basic problem economic construction facing with. Shelter and real estate-related, transportation and automobile production, road and bridge construction and so on-related, and then decorating construction of square, garden and venues become Constructing Cities. In constructing Cities everyone had to participate in the real estate market and can not be avoided,so the real estate issue is a difficult point pulling the whole society and the lead of national economy. In other words, real estate is not only an essential component of GDP, but also the absolute power of creating GDP and pulling cities constructing, This proves that Hp and GDP are direct related.
GDP is operating results of the technology-productivity created by human beings,should be shared by the human generations. However, labor practice is the basic means to release creatively the economic efficiency of science-technology, so the labor wages should be rising with GDP growth, accordingly, to reduce the share of GDP by means of the share capital or increase capital gains taxes.
Although the CIP is the coefficient of Hp-to-Income, considering the housing is not the whole investment of family or personal,which the housing average price level( Hp) with Wa are direct proportion is closer to the real,that is Hp = Wa × CIP.
In summary, there is direct proportion relationship between.Hp ,GDP,Wa.But in fact, when GDP growth and Hp rising, wages may not increase.Rising wages in China in recent years promoted mainly by civil service wage reform, by actions that monopoly industries managementteams get more, whereas wages of workers in private enterprises slightly incremental driven by the high prices and the high profits.Hp may not increase with GDP growth, such as Hp in China before 2002 has been 2,000 yuan / square wandering up and down;Hp increases by in a single day which may surpass GDP increasing by but rise suddenly and sharply, such as Hp after 2006 was speculation monopoly in the compensatory growth.
(C) The Hp structure as same layout as the Mountain Style(HMS) with GDP growth.
High or low of output rate of land is the reflections of development and application of science -technology productivity, Unit land outputs rates height in economic developed region reflect high GDP, when GDP high, average income of the residents should be high.The rules of driving Hp soaring by high land output rate and high average income indicate HMS, the peak is in the city center and the foot is in the neighboring suburb. Due to different levels of economic development in not the same city, Namely,city value has height or low,thus forming large or small mountain and high or dwarf mountain.These large and small mountains was linked by "plain, low-lying land" of Hp --- village, to form the housing market "rivers and mountains",a striking resemblance with the Earth's surface in the whole country .
Motherland's “mountains and rivers”is owned commonly by the whole people,now hosted by the Government and acted for the people by good at value-keeping added value person, and therefore two-thirds of the land revenue should be allocated national basis consumption, that give Hp marcoeconomic regulation and control function to reduce "three" gap, such as distribute stock and social insurance among public,to strengthen social security system, and so on.
(D) The law of synchronizing travelling of all prices(LSTP)
According to PGWH, Hp leads to rising once out of control, it is best to first stabilize, and then force labor costs- wages to rise first, and try to keep other prices up with Hp.This will ensure the industries profits rather, prevent the manufacturing industry funds from real estate market speculation. Fine-tuning Subsequently, namely according to the two definations of Hp to make Hp-to-Income in compliance with CIP = (0,4] constraints, based on increasing labor wages and reducing the "three" gap, govern all price structure. So, not blindly complain about high Hp, do not fear a Japanese-style Hp crash. LSTP is that as development of scientific-technology and productive,under currency sign's gold content is basically invariable condition,the Hp run from low to high, can only stable and may not be dropped. this is related to the security of financial systems, GDP steady growth, and the overall coordination of national economic development, and followwing the law of the evolution of socio-economic with advances in technology.
In fact, from the reform and opening up, particularly since 2007, the prices of raw materials, agricultural products and labor-intensive products soared to varying degrees, except that violence speculation makes Hp too high in a small number of urban,the overall level of Hp is basic balanced with other prices(ought to have known, real estate with the duality of consumption and investment, Hp should be three times ordinary prices in normal conditions), but the scale of throwing into fund to buy house is large, the effect to other consuming is big too.But for the ratio of Hp-to-Income far exceeds the CIP = (0,4] range, the case that macro adjustment function of Hp reducing the "three" gap has not been, we cannot but worry about the possibility of Japanese-style collapse, Hp become a focal point of everyone's vocal opposition is not surprising.
3. The main function of Hp
Hp has its own theory laws, embodied in its function necessarily.
(A) The basic functions and main function of Hp
Based on CIP = (0,4] to implement Hp = 3 × Hp / 3 can give Hp function to reduce "three" gap. In fact,
based on two groups interest balance of urban -rural and workers- peasants, CIP was brought out, through macro control, make Hp / 3 of Hp subsidies three dimensional rural and compensate land transfer, the other Hp / 3 enrich social security.It can be seen, elimination gap of workers-peasants and urban-rural is the main function of Hp ,and narrow the "three" gap is the basic functions of Hp.
Overall understanding human rights, that technology productivity has been created by human in the earth, the surplus value generated by science-technology productivity should be shared by humanity, and thus the government should guarantee jobs for a living of urban residents,and land for a living of rural farmers. Although high output per unit land of urban and suburban given priority to benefit from technological to develope economic,that is the population increased and technological developed, urban land gold content also will increase, with it the building prices and rents on the land will inevitably rise. Based on the natural facts of land non-renewable and indivisibility,shared by all people, science-technology productive development indicates average land output rate of throughout the country or region raising. With the science-technology development and human progress, the output per unit land increasing more and more , rural land requisition compensation should be simultaneously increased, labor wages and income levels should be raised accordingly.
(B) The basic functions of Hp can start the mechanism of wages automatically promoted
When low wages and high Hp, we could play a macro adjustment function of Hp,namely, land revenue subsidy "Agriculture" to improve the life of the peasants, farmers will be secure in their hometown to plan agricultural development; and enriching the social security and narrowing the gap between rich and poor by land income, labor will be to knock off, self-study action requires wages and benefits to increase. At this time there will be recruitment difficulties of urban enterprises, so the employer will be forced to raise wages and benefits to attract workers, subsequently reduce costs and then cut down expenses ,by upgrading onto the road of scientific management. At the same time the state has adopted preferential policies to improve the enterprise development environment, to compensate companies to improve workers wages. Good economic returns, a pay raise will have a solid foundation, with the GDP growth will form a habit operation of raising wages.
In short, follow the Hp law system and development Hp function is in stabilizing Hp to adjust income distribution process, to reduce the "three" gap and to restrain polarization of rich and poor.
4. The Hp functions to narrow the income gap and to overcome the economic crisis
Innovating Hp laws theory and developing Hp function, its approach is based on the Hp function definitions to narrow the income gap, its goal is to achieve equitable distribution, to overcome the economic crisis.
(A) Hp is the grab bar for macroeconomic regulation
General economic content is to achieve consumption system by productive work, the narrow economic meaning is the realization of basic necessities. It is reflected in building a logistics network to connect the residential communities in the inter-city. It has to be layout on gardens of life dotted squares, stadiums, attractions, industrial areas, trade areas, entertainment area, educational and scientific research area in the traffic grid, ... ... this is the trend of constructing cities. Comfortable housing is the main project, a major event related to the livelihood and economic development ,can not be fully market-oriented, ask the Government to play functions of Hp = 3× Hp / 3 to control the macro. Therefore, we should cut into from the duality of consumption and investment of the land, broke down the Hp into three Hp / 3 to balance the interests of urban -rural and workers-peasants,to inhibit the rich-poor gap,and to achieve the main fair in the adjustment of the relationship among social equity, quality and efficiency, GDP. Having controlled the rich-poor gap, the main reason of the economic crisis can be overpowered [3]. On the other hand, the moderately high Hp in the CIP = (0,4] help to improve wages, to adjust income distribution and to promote GDP growth. Therefore, seizing Hp , government can treat the economic crisis combine with balancing the interests of workers-peasants and urban-rural areas, inhibiting polarization of rich and poor , improving people's livelihood.
(B) The functions principle of elimination the economic crisis and to flatten "three" gap by applying Hp = 3 × (Hp / 3) formula
Land-based non-renewable and not allowed to cut apart feature, especially in development of science–technology and productability come from the ancient and modern scientific and cultural innovation, the ownership of the global village should be joint possession by all mankind，land outputs natural gift being enjoyed by human being, the earth home being defended commonly by human being. Therefore, surplus value created by relying on scientific-technological advances and continue to improve the land output rate of units and so on ,should be shared by humanity;the technological and cultural had been created cooperatively by human ancestors that can not determine ownership of intellectual property, the whole society create the surplus value and the land ownership of natural gift all the people have been managed by the government on behalf of the people and management elite individual act for the people, the areas of land productivity high should be compensation for the areas of low output. Because of this, Hp should be broken down into three Hp/3 of the composition. Hp／3 among them should apply to allowance "three agricultures ", agricultural products prices and back-off land sell, and the other Hp/3 used to replenish the social security, and the rest Hp/3 is property developers profit and the cost of building houses. This will develop out wich give first place to reducing the gap between urban-rural and workers-peasants, inhibit the disparity of wealth and overcom the economic crisis for the purpose, play from fair starting functions to improve the livelihood of the people and build a harmonious.The trick of the price structure and CIP is to treat the economic crisis combine with balancing the interests of workers-peasants and urban-rural, inhibiting polarization of rich and poor , improving people's livelihood, to maintain GDP development in building a harmonious society.
However, Hp soared in recent years in
5. Real estate economic situation analyses and its countermeasure suggestions of regulation
Along with the development of science–technology and productivity, yield continuous increase in land, in the conditions of non-lowering monetary gold content, reflecting the GDP continuous growing. When GDP growth, wages should increase, thus prices and Hp should also improve. The fact is that before 2006, the Hp hovered stagflation; after 2006, Hp carried out compensatory growth market after growth of years in GDP and driven by personal income accumulated; in 2008, Hp soared, it pertains to the price habitual run and market speculation. But in the meantime, the unrestricted capital gains and the right sublet out of control caused so rapid widening gap between rich and poor, little change in labor wages,emerged the phenomenon that Hp more and more deviated from labor income. Balance increase simultaneously between Hp, GDP and wage is the Hp reasonable signs. To achieve a reasonable Hp, Hp control measures should be the best to stabilize the price, focus on increased wages, increase capital income tax, raise the price level in adjusting the price structure, then develop function to restrain the polarization of the rich and the poor in various adjustment "button" of Hp , capital gains, wages, wealth gap, and the price.
That the relation of synchronize growth between Hp ,GDP/wages was not reflected was formed by what we do not know about the nature and law of Hp and come to mishandle macro-economy. In the condition of the polarization of the rich and the poor, even if the wage levels of absolute majority workers is lower, the rich crowd can still raise the average income level, who are rich overnight relying on huge capital to get abundant income and to sublease power.By Hp = Wa × CIP, we can see Hp level will still high. So now Chinese, on the one hand cry Hp high, most people's wages, income is so low that they can't afford housing; on the other hand, minority becoming rich overnight is common occurrence, the rich groups have increasingly expanded, income per capita vigorous growth, so strange if Hp do not soar！Following the law system of Hp, people must ask the Government to maintain a GDP growth according to the level of science -technology and productivity, to raise labor wages and to reduce capital income; based on CIP = (0,4] interval , the same time government should allows to speculate in the edge of CIP = (0,4], control the height of housing market "top", to expand the supply area of house of prices in middle and low.
The connotation of Hp stability is to maintain moderately high Hp in CIP = (0,4] interval, to maintain the simultaneous development between science-technology and productivity, land productivity, economic development, and Human being evolution; the extension of Hp stability is to keep balance upgrade between Hp ,GDP, wages and prices. To stabilize Hp can not expect human consciousness, can not expect the government, but to explore Hp functions of control the macro-economy, to set up fair mechanism based on Hp theory. Stable Hp is to meet HMS, requires the economy Policy to maintain the PGWH and to follow the LSTP. If real estate halt development,it will radiate entire industry from the recession of the building materials industry, significantly to lower Hp is a very bad tactics, far inferior to that stabilizing Hp，raising salary to get all popular feeling come out hight bright. Significantly to lower Hp would also endanger the financial system safety and shake the lead of national economy.
References:
[1]Xiaoming Jin. To Found the Regulation Formula of Hp --- CIP = (0,4] finded [J]. Value Engineering, 2007 (8).
[2] Xiaoming Jin. The Quantum Baisc on Economics：Shooting Quantum [J]. Far Eastern Chinese business review (
[3] Xiaoming Jin. The Principles of Economic Cybernetics＆Management Automation [M].
Brief introduction to the author:
Jin Xiaoming (1963 -), Male (the Han nationality) , born in Xinjiang county Jiangxi province PRC,
, senior engineer , 2008 Chinas Value 's Most Influential hundred experts. Study direction: Economic cybernetics and administration automation.
Fund Project:
①2009 education department research project Zhejiang Province PRC (Y200909572)；
②2010