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Real-Time Warning Signs of Emerging and Collapsing Chinese House Price Bubbles

Listed author(s):
  • Xi Chen
  • Michael Funke

The recent increase in Chinese house prices has led to concerns that China is vulnerable to asset price shocks. In this paper, we apply recently developed recursive unit root tests to spot the beginning and the end of potential speculative bubbles in Chinese house price cycles. Overall, we find that except for 2009–10 actual house prices are not significantly disconnected from fundamentals. Thus, the evidence for speculative house price bubbles in China is in general weak.

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File URL: http://ner.sagepub.com/content/223/1/R39.abstract
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Article provided by National Institute of Economic and Social Research in its journal National Institute Economic Review.

Volume (Year): 223 (2013)
Issue (Month): 1 (February)
Pages: 39-48

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Handle: RePEc:sae:niesru:v:223:y:2013:i:1:p:r39-r48
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