This work introduces residential land into a quantitative non-linear model of financial crises devised to study the design and effectiveness of optimal macroprudential policy. The model accounts for news shocks about future fundamentals and regime changes in global liquidity. Results show that...

Hong Kong, China's housing market witnessed dramatic appreciations recently, with the price index for private domestic housing units being 3 times higher than 10 years ago. This trend is supported by both internal and external factors, as illustrated in this paper. By providing a theoretical...