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This paper investigates whether housing collateral is important to the business cycle in China. We develop two models, one without housing collateral as benchmark and one variant allowing for it. Indirect Inference procedure tests these two models' compatibility with the data. We find that the...
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rates and house prices. Some Chinese banks, especially the Bank of China, have been exposed to the US mortgage … mortgage defaults than their western counterparts because house buyers are mainly urban and high income residents who are …
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