Asset bubbles and frictional intermediation

Wang, Chenxi

doi:10.1007/s00199-022-01482-w

Cited by 4 publications

(1 citation statement)

References 27 publications

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“…No one likes the calm after clearing because humankind is greedy and wants to gain more every second. The Minsky moment is not a moment, but an era [8,9].…”

Section: Financial Bubblementioning

confidence: 99%

How U.S. Bond Yield Curve Invert Relate to the Upcoming Financial Crisis

Liu

2024

AEMPS

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This passage is mainly based on the current global economic situation as well as the association with historical events to discuss the formation of an inverted yield curve in U.S. bonds and being an indicator of a financial crisis, how the inverted yield curve of the U.S. bonds can relate to the upcoming financial crisis. By analyzing the current economic performance and the publics psychological health after the epidemic era, a disappointing conclusion can be induced: a financial crisis may happen in the short future. Such a guess is based on the central banks action of consistently increasing interest rates and the publics unoptimistic outlook on the macroeconomic circumstances, which is also the reason that causes the occurrence of the phenomenon of the inverted yield curve of the US bonds. Associating with the rising stock market in the US, it is obvious that a huge financial bubble already formed. The government chooses the strategy of Minsky Moment to deal with the coming problems. The current situation is challenged by multi-factors and if the government cannot adjust its policies to deal with these multi-factors properly, the whole financial bubble will collapse and bring a catastrophe that is bigger than ever.

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“…No one likes the calm after clearing because humankind is greedy and wants to gain more every second. The Minsky moment is not a moment, but an era [8,9].…”

Section: Financial Bubblementioning

confidence: 99%

How U.S. Bond Yield Curve Invert Relate to the Upcoming Financial Crisis

Liu

2024

AEMPS

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Rational housing demand bubble

Clain-Chamoset-Yvrard,

Raurich,

Seegmuller

2023

Econ Theory

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We provide a unified framework with demand for housing over the life cycle and financial frictions to analyze the existence and macroeconomic effects of rational housing bubbles. We distinguish a housing price bubble, defined as the difference between the housing market price and its fundamental value, from a housing demand bubble, which corresponds to a situation where a pure speculative housing demand exists. In an overlapping generation exchange economy, we show that no housing price bubble occurs. However, a housing demand bubble may occur, generating a boom in housing prices and a drop in the interest rate, when households face a binding borrowing constraint. Multiplicity of steady states and endogenous fluctuations can occur when credit market imperfections are moderate. These fluctuations involve transitions between equilibria with and without a housing demand bubble that generate large fluctuations in housing prices consistent with observed patterns. We finally extend the basic framework to a production economy and we show that a housing demand bubble increases the housing price, housing price to income ratio and economic growth.

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Bubbly dynamics, frictional intermediation and policy analysis

Liu,

Wang

2024

Economics Letters

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Asset bubbles and frictional intermediation

Cited by 4 publications

References 27 publications

How U.S. Bond Yield Curve Invert Relate to the Upcoming Financial Crisis

How U.S. Bond Yield Curve Invert Relate to the Upcoming Financial Crisis

Rational housing demand bubble

Bubbly dynamics, frictional intermediation and policy analysis

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