Economic Bubbles And It's Study About The Real-Estate In China

Economic bubble is a sort of asset price that is departure from the its economic foundation. Economic bubble is involved every part of the society and the economy, and will influence the function of macroeconomic, the safety of finance, distribution of the fortune, stabilization of the society, and the micro lay such as the decision-making of the investment and so on.Expectation appears great effect during the generation and development of the bubble. Expectation influences the supply and the demand of the market, especially the commodity which is speculation. Rational expectation is the reasonable hypothesis of all. The inflating and broken of bubble will bring on crisis of economy and finance. Stocking and real-estate are the most important carriers of bubbles. The main reason that why the real-estate is easy to bring about bubbles is that the scarce of the land, the lowness of the flexibility of the supply. The bubbles of real-estate have brought crisis of economy and finance in many countries, especially in the developing countries. Because of the natural relationship to the finance, the broken of bubbles will destroy the chain of the capital, and endanger the safety of the finance.The main behavior of bubbles in our real-estate are the over-rapid development of the investment in real-estate, which is great rapid than the speed of the national economy development. The purchase of land are great more than ever, the rate of housing vacancy is increasing. All these have indicate that the development of our real-estate is over-heated and the bubble is appears. On the one hand is that the development of our real-estate is faced with the new period, though the bubbles in the national area are not appeared, but it is necessary to keep eyes on the development of the present real-estate. Through the study on the ratio of housing price to the income and the rate of housing vacancy, the bubbles of our real-estate can be analyzed. It is a systemic working to avoid the bubbles. Because of the great harm, it is necessary to establish the pre-alarming system.