Discussion of Home-buyers, Housing and the Macroeconomy

نویسنده

  • Malcolm Edey
چکیده

We have learned from other contributions to this conference that it can be diffi cult to pin down whether a particular rise in asset prices constitutes a bubble, especially at the time it is happening. It may be easier ex post – the defi nition that says that you know youʼve had an asset bubble when the price has just fallen by 40 per cent. Despite these uncertainties, I think it makes sense to step back and ask the broader question as to whether certain markets can be classifi ed as bubble-prone. A reasonably clear defi nition of a bubble-prone market would be one with two characteristics – where the price dynamics are driven to a signifi cant degree by extrapolative expectations, and where this on occasions generates sustained departures of prices from their long-run determinants.

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تاریخ انتشار 2003