Toward A Theory of Bubble Economics

In our recent article for the Lincoln Institute of Land Policy, we calculate the changes in real estate prices needed to trigger an economic crisis. For China, we find that a 30% real estate price drop should bring economic growth to a complete stand-still.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2785503

temp

More importantly, we describe a model which takes into account economic phenomenon which only occur during the collapse of a bubble. To calibrate our model, we data from real estate price collapses from other large economies.

temp

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s