Rational land and housing bubbles in infinite-horizon economies

Book section: This paper considers rational land and housing bubbles in an infinite-horizon general equilibrium model. Their demands rest on two different grounds: the land is an input to produce while the house may be consumed. Our work differs from the existing literature in two respects. First, dividends on both these long-lived assets are endogenous and their sequences are computed. Second, we introduce and study different concepts of bubbles, including individual and strong bubbles.

Author(s)

Cuong Le Van, Stefano Bosi, Ngoc-Sang Pham

Publisher(s)
  • Springer-Verlag
Scientific editor(s)
  • K. Nishimura, A. Venditti and N. Yannelis
Collection
  • Studies in Economic Theory
Title of the work
  • Sunspots and Non-Linear Dynamics – Essays in honor of Jean-Michel Grandmont
Date of publication
  • 2017
Keywords JEL
C62 D51 D9 G13
Keywords
  • Land bubble
  • General equilibrium
  • Infinite horizon
  • Housing bubble
Pages
  • 203-230
Version
  • 1