We examine whether asset pricing theory can explain residential property prices. Using quarterly data for Local …

bubble. In this chapter, we review the stylized facts of housing bubbles and discuss theories that can potentially explain … swings in simple rational models. An incorrectly underpriced default option can make rational bubbles more likely. Many … nonrational explanations for real estate bubbles exist, but the most promising theories emphasize some form of trend chasing …

”bubbles”. In this paper, we provide a model-free test of rational bubbles and we apply it to the U.S. housing market. Based on …

This paper argues that Milton Friedman’s failed to recognize the asset bubbles leading up to the financial crisis of … quantity theory at the heart of the doctrine of monetarism. The “clinical method” used by Friedman and Schwartz was derived … positive economics. The clinical method of theory construction, because it relies heavily on statistical correlations between …

unsustainable, there is uncertainty as to the sustainability of the level of house prices. This article applies asset-pricing theory …