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Real Estate Soars and Financial Crises: Recent Stories

Graduate School of Future Strategy, Korea Advanced Institute of Science and Technology (KAIST), Daejeon 34141, Korea
Department of Geography, Chonnam National University, Gwangju 61186, Korea
HSBC Business School, Peking University, Shenzhen 518055, China
Authors to whom correspondence should be addressed.
Sustainability 2018, 10(12), 4559;
Received: 15 November 2018 / Revised: 27 November 2018 / Accepted: 28 November 2018 / Published: 3 December 2018
(This article belongs to the Special Issue Sustainability and Econophysics)
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 stock market, triggering a sense of déjà vu from the 2008 crisis. However, we show that the relationship between real estate and financial markets 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. View Full-Text
Keywords: financial crash; real estate bubble; stock market financial crash; real estate bubble; stock market
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MDPI and ACS Style

Jang, H.; Song, Y.; Sohn, S.; Ahn, K. Real Estate Soars and Financial Crises: Recent Stories. Sustainability 2018, 10, 4559.

AMA Style

Jang H, Song Y, Sohn S, Ahn K. Real Estate Soars and Financial Crises: Recent Stories. Sustainability. 2018; 10(12):4559.

Chicago/Turabian Style

Jang, Hanwool, Yena Song, Sungbin Sohn, and Kwangwon Ahn. 2018. "Real Estate Soars and Financial Crises: Recent Stories" Sustainability 10, no. 12: 4559.

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