Rational housing bubble

20 Years of Research on Real Estate Bubbles, Risk and Exuberance: A Bibliometric Analysis

“…This part of the literature focuses on the calculation model and detection method of asset bubbles, providing a theoretical basis for the measurement of bubbles in the real estate market [25][26][27]. For example, Zhao (2015) [28] in Cluster 2 found that there was a rational bubble in the real estate market, which was caused by the overlapping status of housing holders and real estate investors. In Cluster 7, Sornette and Zhou (2004) [29] discussed the main role of foreign capital inflows in the process of the new economy bubble of the United States in 2000, and provide some suggestions on the anti-bubble of the United States economy and stock market.…”

“…These literature studies focus on various types of the bubbles in real estate markets, among which price bubbles and rational bubbles are the earlier research hotspots, while explosive bubbles are the latest research hotspots [16][17][18][31][32][33]. Among them, Zhao (2015) [28] studies an economy inhabited by overlapping generations of households and investors, with the only difference between the two being that households derive utility from housing services, whereas investors do not, forming a rational bubble in the market. Gil-Alana et al (2019) [34] study the rational and explosive bubbles in the real estate market of Chile and confirmed the existence of bubbles through empirical research.…”

Investigating the relationship between firm investment sensitivity and financing constraints with a distinctive Chinese firm data set

“…The second factor is the tendency to use the housing market as a store of value as a result of lacking investment assets and the expected need of savings, which has driven up housing demand (Zhao, 2015). An underlying Chinese household common wisdom is that because of the under-developed social security system, there has historically been a strong preference for savings for the unforeseeable future costs of healthcare, education, and elderly care (Wu, 2015).…”

“…An underlying Chinese household common wisdom is that because of the under-developed social security system, there has historically been a strong preference for savings for the unforeseeable future costs of healthcare, education, and elderly care (Wu, 2015). This is further necessitated by a pension reform that started in 1999 shifting the traditional pay- Chen 8 as-you-go (PAYG) system to a mixture of PAYG system and fully funded system, which decreased the replacement rate from around 75% to only 45% in 2009 (Zhao, 2015). However, during the first decade of 21 st century, Chinese household investment opportunities are limited to low-rate bank deposit and government bond aside from the overly speculative stock market and more recent wealth management products (Zhao, 2015).…”

“…This is further necessitated by a pension reform that started in 1999 shifting the traditional pay- Chen 8 as-you-go (PAYG) system to a mixture of PAYG system and fully funded system, which decreased the replacement rate from around 75% to only 45% in 2009 (Zhao, 2015). However, during the first decade of 21 st century, Chinese household investment opportunities are limited to low-rate bank deposit and government bond aside from the overly speculative stock market and more recent wealth management products (Zhao, 2015). To Chinse homeowners, housing is an asset that can retain the benefit of value appreciation and is believed to be an effective method to cope with the impact of inflation (Wu, 2015).…”