Preprint
Bubble Economics How Big a Shock to China’s Real Estate Sector Will Throw the Country into Recession, and Why Does It Matter?
How far do China’s property prices need to drop in order to send the country into a recession? What does this question tell us about the way Bubble Economies work? In this paper, we develop a theory of Bubble Economics – non-linear and often “systemic” (in the mathematical sense of the word) forces which cause significant misallocations of resources. Our theory draws on the standard elements of most stories of Bubble Economics, looking at the way banking, construction, savings/investment, local government and equities sectors interact. We find that Bubble Economies’ GDP growth can depend on property prices changes differently at different times -- depending on risks building up in the economy. We argue that a tacit, implicit Bubble Risk Factor might provide a way of understanding a key variable academics and practitioners omit when they try to explain how economies (mis)allocate resources during bubbles. A 15%-20% property price drop could cause recession, if China’s economy resembles other large economies having already experienced property-related asset crises. However, a 40% decline would not be out of the question.
- Sprache
-
Englisch
- Klassifikation
-
Wirtschaft
Computable and Other Applied General Equilibrium Models
Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: Asia including Middle East
Real Estate Services
Financial Crises
- Thema
-
China recession
bubble economics
fragility
housing bubble
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Michael, Bryane
Zhao, Simon
- Ereignis
-
Veröffentlichung
- (wer)
-
Lincoln Institute of Land Policy
- (wo)
-
Cambridge, MA
- (wann)
-
2016
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Preprint
Beteiligte
- Michael, Bryane
- Zhao, Simon
- Lincoln Institute of Land Policy
Entstanden
- 2016
Ähnliche Objekte (12)
SPACs with focus on China
What Determines M&A Legal and Financial Advisors’ Competitiveness in an International Financial Centre: Using China’s Going Out Policy as a Natural Experiment
The Case for the Extra-Territorial Application of Corporate Governance Standards in China
Why do some countries have more COVID-19 cases than others? Evidence from 70 most affected countries sans China
The Role of Hong Kong’s Financial Regulations in Improving Corporate Governance Standards in China: Lessons from the Panama Papers for Hong Kong
Towards Building Shared Prosperity in Sub-Saharan Africa: How Does the Effect of Economic Integration Compare to Social Equity Policies?
New Imperialism or New Capitalism?
No Shortage of Profit: Semiconductor firms and the differential effects of chip shortages
The Impact of Patent Applications in the Context of the ESG Model at World Level
Aggregation with sequential non-convex public- and private-sector labor suply decisions
Tourism in the Portuguese Rural Areas
Effect of the Utilization of Non-Reciprocal Trade Preferences on Trade Policy in Beneficiary Countries
SPACs with focus on China
What Determines M&A Legal and Financial Advisors’ Competitiveness in an International Financial Centre: Using China’s Going Out Policy as a Natural Experiment
The Case for the Extra-Territorial Application of Corporate Governance Standards in China
Why do some countries have more COVID-19 cases than others? Evidence from 70 most affected countries sans China
The Role of Hong Kong’s Financial Regulations in Improving Corporate Governance Standards in China: Lessons from the Panama Papers for Hong Kong
Towards Building Shared Prosperity in Sub-Saharan Africa: How Does the Effect of Economic Integration Compare to Social Equity Policies?
New Imperialism or New Capitalism?
No Shortage of Profit: Semiconductor firms and the differential effects of chip shortages
The Impact of Patent Applications in the Context of the ESG Model at World Level
Aggregation with sequential non-convex public- and private-sector labor suply decisions
Tourism in the Portuguese Rural Areas
Effect of the Utilization of Non-Reciprocal Trade Preferences on Trade Policy in Beneficiary Countries
SPACs with focus on China
What Determines M&A Legal and Financial Advisors’ Competitiveness in an International Financial Centre: Using China’s Going Out Policy as a Natural Experiment
The Case for the Extra-Territorial Application of Corporate Governance Standards in China
Why do some countries have more COVID-19 cases than others? Evidence from 70 most affected countries sans China
The Role of Hong Kong’s Financial Regulations in Improving Corporate Governance Standards in China: Lessons from the Panama Papers for Hong Kong
Towards Building Shared Prosperity in Sub-Saharan Africa: How Does the Effect of Economic Integration Compare to Social Equity Policies?
New Imperialism or New Capitalism?
No Shortage of Profit: Semiconductor firms and the differential effects of chip shortages
The Impact of Patent Applications in the Context of the ESG Model at World Level
Aggregation with sequential non-convex public- and private-sector labor suply decisions
Tourism in the Portuguese Rural Areas