Costly Real Estate Bubbles?
5 August 2016
ADBI, Tokyo, Japan
ADBI’s Seminar Series brings eminent persons to ADBI to encourage debate among policy makers, researchers, academics, think tanks, and other audiences interested in economic development challenges in Asia and the Pacific.
Huanhuan Zheng is an assistant professor jointly affiliated with Lau Chor Tak Institute of Global Economics and Finance, and the Department of Economics, in The Chinese University of Hong Kong. She specializes in international finance, financial economics, and behavioral economics and finance.
The seminar will help explain the impact of housing cycles on economic growth, using a new dataset that covers housing price information for 19 countries from the first quarter of 1975 to the third quarter of 2013. Results show that housing booms enhance economic growth, but the subsequent corrections of artificially inflated real estate may either undermine or stimulate output, depending on the depth of correction and the market environment. In the absence of a banking crisis, large housing price depreciations are associated with a strong recovery in economic output and productivity growth. The results are more pronounced for countries without mortgage insurance or personal bankruptcy laws, those with civil-law system countries, and in countries where there is no banking crisis.
This seminar shows housing booms enhance economic growth, but the subsequent correction of artificially inflated real estate may either undermine or stimulate output, depending on the depth of correction and the market environment.
Time of event
10:00 – 11:00