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Conference Paper: Haven't Learned from the Past? A Common Sympton of Asset Bubble Implosions

TitleHaven't Learned from the Past? A Common Sympton of Asset Bubble Implosions
Authors
KeywordsAsset Bubble
Real Interest Rate
Credit Expansion
Real Interest Rate
Credit Expansion
Asset Bubble
Issue Date2009
PublisherThe European Real Estate Society
Citation
The 16th Annual European Real Estate Society Conference (ERES), Stockholm, Sweden, 2009 How to Cite?
Abstract'By reviewing the previous three asset bubble implosions, viz. (1) the ìLost Decadeî of Japan in the 1980s; (2) the Asian Financial Crisis in Hong Kong in 1997; and (3) the Financial Tsunami in the USA in 2008, a common symptom of negative real interest rate is very clearly revealed before the implosion of the three bubbles, although the bubbles might have been caused by very different reasons. Credit expansion due to negative interest rate has long been recognized since Irving Fisherís The Theory of Interest, yet in the study of the three asset bubbles, the central governments or the Federal Reserve of the US had to cut substantially the short-term interest rate for various reasons, even in a situation of extremely high inflation rate. The asset pricing bubbles are bound to be burst in the light of the resulting negative interest rate. This paper reviews the formation and the implosion of the three asset bubbles, with a focus on the temporal change of their real interest rates. It also studies the reasons why the central governments had to cut the interest rate, even when the inflation rate was high. It aims to argue that, asset bubble implosion may not be prevented nor accurately predicted though, there is a clear symptom in the markets. It also contends that, unfortunately, even if the symptom can be known, next asset bubbles would still be formed and imploded.'
DescriptionPreviously a conference presentation (with PowerPoint file), see link: http://eres.architexturez.net/doc/oai-eres.id-eres2009_332
Published later as journal article, see hub record: http://hub.hku.hk/handle/10722/81832
Persistent Identifierhttp://hdl.handle.net/10722/64030

 

DC FieldValueLanguage
dc.contributor.authorYiu, CYen_HK
dc.contributor.authorXu, Yen_HK
dc.contributor.authorCao, Cen_HK
dc.date.accessioned2010-07-13T04:38:18Z-
dc.date.available2010-07-13T04:38:18Z-
dc.date.issued2009en_HK
dc.identifier.citationThe 16th Annual European Real Estate Society Conference (ERES), Stockholm, Sweden, 2009-
dc.identifier.urihttp://hdl.handle.net/10722/64030-
dc.descriptionPreviously a conference presentation (with PowerPoint file), see link: http://eres.architexturez.net/doc/oai-eres.id-eres2009_332-
dc.descriptionPublished later as journal article, see hub record: http://hub.hku.hk/handle/10722/81832-
dc.description.abstract'By reviewing the previous three asset bubble implosions, viz. (1) the ìLost Decadeî of Japan in the 1980s; (2) the Asian Financial Crisis in Hong Kong in 1997; and (3) the Financial Tsunami in the USA in 2008, a common symptom of negative real interest rate is very clearly revealed before the implosion of the three bubbles, although the bubbles might have been caused by very different reasons. Credit expansion due to negative interest rate has long been recognized since Irving Fisherís The Theory of Interest, yet in the study of the three asset bubbles, the central governments or the Federal Reserve of the US had to cut substantially the short-term interest rate for various reasons, even in a situation of extremely high inflation rate. The asset pricing bubbles are bound to be burst in the light of the resulting negative interest rate. This paper reviews the formation and the implosion of the three asset bubbles, with a focus on the temporal change of their real interest rates. It also studies the reasons why the central governments had to cut the interest rate, even when the inflation rate was high. It aims to argue that, asset bubble implosion may not be prevented nor accurately predicted though, there is a clear symptom in the markets. It also contends that, unfortunately, even if the symptom can be known, next asset bubbles would still be formed and imploded.'-
dc.languageengen_HK
dc.publisherThe European Real Estate Society-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectAsset Bubble-
dc.subjectReal Interest Rate-
dc.subjectCredit Expansion-
dc.subjectReal Interest Rate-
dc.subjectCredit Expansion-
dc.subjectAsset Bubble-
dc.titleHaven't Learned from the Past? A Common Sympton of Asset Bubble Implosionsen_HK
dc.typeConference_Paperen_HK
dc.identifier.emailYiu, CY: ecyyiu@hkucc.hku.hken_HK
dc.identifier.emailXu, Y: sherryxu10@gmail.comen_HK
dc.identifier.emailCao, Y: coune44@yahoo.com.cnen_HK
dc.identifier.authorityYiu, CY=rp01035en_HK
dc.identifier.hkuros159628en_HK
dc.identifier.spage1-
dc.identifier.epage22-
dc.publisher.placeNew York-

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