Real estate soars and financial crises: Recent stories

Hanwool Jang, Yena Song, Sungbin Sohn, Kwangwon Ahn

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This paper studies the contribution of real estate bubble to a financial crisis. First,we document symptoms of a real estate bubble along with a slowdown of the real economy and find indicators of an imminent crash of the stockmarket, triggering a sense of déjà vu fromthe 2008 crisis. However, we show that the relationship between real estate and financialmarkets has changed since the crisis. The empirical analyses provide evidence that the monetary policy has recovered its control over mortgage rates, which had been lost prior to the global financial crisis, and that the real estate market does not have a Granger causality relationship with the stock market any more. Findings suggest that an imminent financial market crash is not likely to be catalyzed by a real estate bubble.

Original languageEnglish
Article number4559
JournalSustainability (Switzerland)
Volume10
Issue number12
DOIs
Publication statusPublished - 2018 Dec 3

Fingerprint

financial crisis
real estate
bubble
stock market
monetary policy
financial market
real estate market
causality
market
economy
Financial markets
evidence

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Management, Monitoring, Policy and Law

Cite this

Jang, Hanwool ; Song, Yena ; Sohn, Sungbin ; Ahn, Kwangwon. / Real estate soars and financial crises : Recent stories. In: Sustainability (Switzerland). 2018 ; Vol. 10, No. 12.
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Real estate soars and financial crises : Recent stories. / Jang, Hanwool; Song, Yena; Sohn, Sungbin; Ahn, Kwangwon.

In: Sustainability (Switzerland), Vol. 10, No. 12, 4559, 03.12.2018.

Research output: Contribution to journalArticle

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