Book Chapter

Rational Land and Housing Bubbles in Infinite-Horizon Economies

Stefano Bosi (University of Evry Paris-Saclay) & Cuong Le Van & Ngoc-Sang Pham (EM Normandie Business School)

 

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.

 

 

 

 

Published in

Sunspots and Non-Linear Dynamics (Essayss in Honor of Jean-Michel Grandmont), 2016


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