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.


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.





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