An Emprical Research Of Real Estate Ratinal And Irrational Bubbles In China

The bubble economy has not been a new phenomenon, it has been repeated in some historical events, such as the Netherlands "tulip shower" occurred in1636, which attracted many scholars began a research of "bubble". Since then the French Mississippi bubble events, British stock bubble events in south sea happened. When the bubble burst, the wealth instant disappeared, the company and personal bankruptcy. This series of bubble economic events warned people to improve for foam vigilance, and people turn pale even at the mention of "bubble". Now Chinese real estate market price appeared continuously and the rise rapidly. Someone said, house prices are rising so fast, or too big, leading most people had not the money to buy a house, house prices went far beyond the people’s consumption ability......Most of the house was hold by the few, the few further increased wealth through the house property, and the gap between the people is bigger and bigger. Therefore, there are bubbles in Chinese real estate market inevitably. Based on the discussion, the Chinese government has issued a series of policies and measures to control the real estate market. Especially in2011years, from four aspects to fully control requirements.Because people focus on the economic consequences after bubble bursting and the consequences are often very bad, which lead people always to look at the bubble hostility. However, are all of the bubbles "bad" and is to burst? Referring to "bubble", we should distinguish stages and types, and not treat as the same. In the1980s, concept of "the rational bubble" given by Blanchard, give us another revelation. The so-called "rational bubble", is to point to efficient market that investors can use the information of the market to make rational expectations, asset prices going upward relative to the fundamental value. The bubble still exists in assumption that people is rational. It has been caused by sustained economic growth and in turn promotes economic growth, which is a benign cycle. And with the corresponding "irrational bubble", it is to relax assumptions of efficient market and the rational anticipation. Its analysis is from the point of view of irrational. This article attempts to analyze the bubble of the real estate market in China from the rational and irrational. By using35cities and13years from1998to2010of panel data, we try to analysis whether rational bubble existed in Chinese real estate market. It was found that, on the assumption of rational expectations that people can use the information to anticipate house prices in future, housing prices rose with the fundamental value. In other words, there was not rational bubble in our real estate market. Later, from the point of view of irrational, we use speculative degrees to measure the speculative bubble in the real estate markets. By using12cities’data to calculate their speculative degrees and found the real estate market of some first-tire cities have more speculative activities. Finally, according to the results of the study of Chinese real estate market, we make forward related suggestions on regulation policy.