Heterogeneous housing bubbles and monetary policy
本文在一个统一框架下区分理性与非理性泡沫，利用中国城市数据发现紧缩货币政策能抑制理性泡沫但对非理性泡沫效果有限，并证实限购政策的有效性。
This paper isolates rational and naive bubbles within a unified framework allowing bounded rationality, and studies how monetary policy surprises affect these bubbles’ characteristics differently. Employing a comprehensive dataset in urban China, our results demonstrate that both the magnitude and type of housing bubbles evolve across locations over time. Tightening monetary policy is found to exert a containing role in rational bubble dynamics but its role in naive bubbles is less significant. Our results confirm the effectiveness of contractionary monetary policy and home purchase restrictions in combating China’s housing bubbles thanks to the nationwide dominance of a rational bubble type.