BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Real-time warning signs of emerging and collapsing Chinese house price bubbles
() and Xi Chen
Abstract: The recent increase in Chinese house prices has led to
concerns that China is vulnerable to asset price shocks. In this paper, we
apply recently developed recursive unit root tests to spot the beginning
and the end of potential speculative bubbles in Chinese house price cycles.
Overall, we find that except for 2009–2010 actual house prices are not
significantly disconnected from fundamentals. Thus, the evidence for
speculative house price bubbles in China is in general weak.
Keywords: house prices; China; speculative bubbles; recursive unit root tests; (follow links to similar papers)
JEL-Codes: C15; G01; G12; R31; (follow links to similar papers)
25 pages, November 14, 2012
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