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House Price Bubbles in China

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  • Yu Ren
  • Yufei Yuan
  • Cong Xiong

Abstract

In this paper, we apply the theory of rational expectation bubbles to the Chinese house market. Rational expectation bubbles imply that negative returns on house prices are, theoretically, less likely to occur if the bubbles exist and persist. Based on the data of 29 cities in China, we find no evidence to support the existence of bubbles in the housing market.

Suggested Citation

  • Yu Ren & Yufei Yuan & Cong Xiong, 2013. "House Price Bubbles in China," Working Papers 2013-10-14, Wang Yanan Institute for Studies in Economics (WISE), Xiamen University.
  • Handle: RePEc:wyi:wpaper:002032
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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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