Financial Over-support and Real Estate Bubble: Theoretical and Empirical Research

Author: Zhou Jingkui
Publisher:
Publish Date: 2005-11-01
Features: The real estate industry is a capital-intensive sector, and the funds required for real estate development are primarily provided by financial institutions. This creates a paradox: a lack of financial support will hinder the development of the real estate industry and reduce its operational efficiency, while excessive financial support may lead to a sustained boom in the real estate market, even resulting in price bubbles. This book addresses this background by taking excessive financial support as a perspective to conduct a comprehensive study on real estate bubbles. The book first proposes the hypothesis of excessive financial support, theoretically proves the hypothesis within a partial equilibrium framework, and analyzes the determination of the critical value of excessive financial support. By establishing a dynamic optimization model of financial support, it explores the optimal path of financial support. Using game theory and information economics theory, it constructs belief models, market uncertainty models, feedback effect and speculative behavior models in the context of excessive financial support to analyze the mechanisms of real estate bubble formation. It also studies the economic effects of real estate bubbles and the price transmission mechanism under excessive financial support. It constructs evaluation systems for excessive financial support and real estate bubble evaluation. Finally, the book conducts an empirical study on the extent of China's real estate financial support and the status of real estate bubbles, and proposes some targeted suggestions on how to avoid real estate bubbles and promote the healthy development of the real estate industry.