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House price bubbles in China

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  • Ren, Yu
  • Xiong, Cong
  • Yuan, Yufei

Abstract

In this paper, we apply the theory of rational expectation bubbles proposed by Blanchard and Watson (1983) to the Chinese housing market. The theory implies that negative returns on house prices are less likely to occur if the bubbles exist. Based on data from 35 cities in China, we find no evidence to support the existence of such bubbles in the Chinese housing market.

Suggested Citation

  • Ren, Yu & Xiong, Cong & Yuan, Yufei, 2012. "House price bubbles in China," China Economic Review, Elsevier, vol. 23(4), pages 786-800.
    • Handle: RePEc:eee:chieco:v:23:y:2012:i:4:p:786-800
    DOI: 10.1016/j.chieco.2012.04.001
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    More about this item

    Keywords

    China house price; Rational expectation bubble; Hazard rate;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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