A simple model of a speculative housing market
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Beschreibung
We develop a simple model of a speculative housing market in which the demand for houses is influenced by expectations about future housing prices. Guided by empirical evidence, agents rely on extrapolative and regressive forecasting rules to form their expectations. The relative importance of these competing views evolves over time, subject to market circumstances. As it turns out, the dynamics of our model is driven by a two-dimensional nonlinear map which may display irregular boom and bust housing price cycles, as repeatedly observed in many actual markets. However, we also find that
speculation may be a source of both stability and instability.
Autor*in
Roberto Dieci
Themen in »A simple model of a speculative housing market«
Boom and bust cycles Housing markets Nonlinear Dynamics Speculation