Is there a housing bubble in China?
Lijian Wei and
Emerging Markets Review, 2019, vol. 39, issue C, 120-132
This paper aims to conduct a series of bubble diagnostic analysis over 35 representative Chinese cities. We apply the Log-Periodic-Power-Law-Singularity (LPPLS) model to detect whether there is any evidence of unsustainable, self-reinforcing speculative behaviours amongst the price series. We also investigate whether the prices had been significantly deviating from economic fundamentals by applying the E-G cointegration test. Overall, we found that 10 out of the 35 cities being examined had exhibited positive LPPLS signals. We propose that it is vital to conduct bubble diagnostic tests and implement relevant policies toward specific bubble characteristics.
Keywords: Housing bubble; Log-period-power-law-singularity; Bubble prediction; Chinese housing market (search for similar items in EconPapers)
JEL-codes: F37 G01 G17 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:39:y:2019:i:c:p:120-132
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