How far do China’s property prices need to drop in order to send the country into a recession? What does this question tell us about the way Bubble Economies work? In this paper, we develop a theory of Bubble Economics - non-linear and often "systemic" (in the mathematical sense of the word)...

The most frequent mortgage loans in the US behave according to nominal interest rates with level loan payments (NRMs), like Fixed Rate Mortgages (FRMs) or Adjustable Rate Mortgages (ARMs). We use a model to show that the tilt effect, an increase of real payments in the early years of the...

We use a model and show how inflation and mortgage loans based on nominal interest rates (NRMs), like FRMs, ARMs or IOs, are a source of instability for housing markets. NRMs allocate risk inappropriately and cause economic tensions due to the tilt effect (Lessard and Modigliani, 1975), the...

In January-October 2012, entities of all the forms of ownership built 476,500 apartments with the total floorspace of 40.1m sq. meters which amounts to 103.8% on the respective period of 2011. The ratio between the price of housing and households' income in 2012 points to the fact that housing...

In January-October 2012, entities of all the forms of ownership built 476,500 apartments with the total floorspace of 40.1m sq. meters which amounts to 103.8% on the respective period of 2011. The ratio between the price of housing and households' income in 2012 points to the fact that housing...

This article provides the in-sample estimation and evaluates the out-of-sample conditional mean and volatility forecast performance of the conventional Generalized Autoregressive Conditional Heteroscedasticity (GARCH), Asymmetric Power Autoregressive Conditional Heteroscedasticity (APARCH) and...

In January-April 2014, 231,100 apartments with floorspace of 17.9m sq. meters which amounts to 127% on the respective period of 2013. In Q1 2014, the average actual cost of building of 1 sq. meter of residential housing rose by 12.52% as compared to Q1 2013 and amounted to Rb 39,290. The ratio...

116,300 residential apartments were built in the period of January 2014 thru February 2014, with a total residential floor space measuring 8.7m sq. meters, an increase 34.3%. year-on-year. According to the Federal Service for State Registration, Cadastre and Cartography (Rosregister), in 2013...

In January–October 2013, entities of all the forms of ownership built 566,800 apartments with floorspace of 45.4m sq. m which is equal to 113.3% on the respective period of 2012. In 2013, the correlation between the price of housing and households' income points to higher affordability of...