Yi zhi xing jiao yi zhe, fangdichan paomo yu fangdichan zhengce: jian lun zhongguo de fangdichan zhengci

Based on the classical De Long et al (1990), we build a model of housing bubbles to
analyze the role of market imperfections (noise traders, liquidity constraint, limited liability and
weak property rights protections, etc) and their interactions in the formation of housing bubbles.
We show that the elasticity of housing supply, mortgage haircut, limited liability in credit market,
durability (e.g., quality or property rights security) of housing all play important roles in bubble
formation. Effective policies need to take into account the interactions of the policies under these
market imperfections. The paper ends up with some implications for China’s housing policies.