LESSONS FROM THE FORMATION OF PROPERTY BUBBLE AND THE CURBING MEASURES IN HONG KONG

Sau-Leung PAUL Yip

Chapter 4 in From the Global Financial Tsunami to the Property Bubbles in Asia:The Need for a New Discipline on Macroeconomic Management, 2019, pp 85-131 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In Section 4.1, the author will first provide a detailed discussion on the lessons from (i) the rapid formation of a property bubble in Hong Kong between March 2009 and February 2013 and (ii) the insufficient curbing measures during this period. In Section 4.2, he will explain that it was necessary at that time for Hong Kong to adopt a bubble-squeezing strategy to pre-empt an eventual bursting of the bubble. Otherwise, the bursting could cause enormous damages to the Hong Kong economy and could trigger another Asian financial crisis through the contagion effect. In Section 4.3, he will then report the detailed design of his proposed bubble-squeezing strategy at that time. Unfortunately, as Hong Kong policymakers failed to appreciate the importance of implementing the bubble-squeezing strategy, he will explain in Section 4.4 that an eventual bursting of Hong Kong’s property bubble seems unavoidable. In Section 4.5, he will propose some policy measures that could mitigate the economic damages during the expected crisis and post-crisis recession…

Keywords: Asset Bubble; Asset Inflation; Economic Crisis; Global Financial Tsunami; Global Financial Crisis; European Debt Crisis; Asian Financial Crisis; Property Market; Stock Market; Macroeconomic Policies; Asia; Housing Policy (search for similar items in EconPapers)
JEL-codes: D00 E00 (search for similar items in EconPapers)
Date: 2019
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