Optimists and Pessimists in the Housing Market
Christopher Palmer and
Additional contact information
Christopher Palmer: MIT Sloan School of Management
No 20191016, Liberty Street Economics from Federal Reserve Bank of New York
Given momentum in house prices over business cycles, research on consumer beliefs since the financial crisis has honed in on the potential importance of extrapolative beliefs?myopically assuming trends in asset prices will continue. Extrapolation is frequently cited as a central reason for excessively optimistic expectations about future asset prices, featuring prominently, for example, in the irrational exuberance narrative of Shiller. Other influential work since the Great Recession has emphasized the outsized role that extrapolative optimists can have in bubble formation. In this post, we look at how much dispersion there is in the amount of house price extrapolation and how consequential extrapolative beliefs could be for house price dynamics.
Keywords: Liberty Street Economics; survey of consumer expectations; Haoyang Liu; Quantile Regression; Home Price Appreciation; extrapolation; heterogeneity; Christopher Palmer; Extrapolation (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://libertystreeteconomics.newyorkfed.org/2019 ... -housing-market.html (text/html)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:fip:fednls:87359
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in Liberty Street Economics from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Amy Farber ().