Financial Support Over-the Real Estate Bubble

Real estate is a capital densely industry and finance institutions provide the real estate industry with quite a few funds, which produces a contradiction: the development of real estate will lag without financial sustainment; excess of financial sustainment will lead to real estate prosperity, even appear price bubble. The aim of my dissertation is to research the real estate bubble from excess of financial sustainment angle. At first, the dissertation gives the definitions on bubbles and the real estate bubble, then we try hard to find out their common ground in the retrospection of bypast bubble phenomena. We consider that spreading of anticipative coherence and speculate action are the commonness of forepart bubble phenomena, however, excess of financial sustainment has been a prominent characteristic of bubbles which have generated recently. At the same time evolvement of bubble theories are consistent with these characteristics. In the past, economists ignored importance of excess of financial sustainment in their bubble theories. So the dissertation tries to found the model between excess of financial sustainment and real estate bubble and the model of dynamic optimization of financial sustainment during a real estate cycle for developing bubble theory. What is the real estate bubble forming mechanism in the background of excess of financial sustainment? In order to thoroughly study this problem, this dissertation foundes the model of belief, uncertainty, feedback and speculation based on game theory in the background of excess of financial sustainment. In the next part of the dissertation, we discuss the economic effects of the real estate bubble. Because the real estate bubble is one of the main characteristics which lead to the real estate market fluctuate. And its influence on society and economy has the effects of social wealth, economic cycle, inflation, collocating resources and social psychology. We consider its negative effects exceed in positive ones, thus, the dissertation also discusses the problems about the prevention and prediction of the real estate bubble. This dissertation gives appraisable index system about excess of financial sustainment and real estate bubble, at the same time we particularly analyze two econometric methods: the test of unit root and cointegration, the test of speculation. In the last part of this dissertation, we analyze the real estate bubble in China and bring forward any beneficial suggestion on for developing the real estate industry and financial industry.