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Housing Market Bubbles and the Currency Crisis: The Case of Thailand

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  • Kar‐Yiu Wong

Abstract

This paper explains with a simple model the collapse of the housing market in Thailand before the 1997 economic crisis. It shows that successive periods of impressive growth of the economy created not only higher demands for housing, but also an increase in people's optimism about market conditions in the future. Both oversupply and bubbles were formed before the market finally crashed. The model explains some of these phenomena, and describes the nature of the bubbles. An ironic possibility is that a faster and more persistent growth of the economy tends to increase the vulnerability of the firms in the market.JEL Classification Numbers: F14, O11, O53.

Suggested Citation

  • Kar‐Yiu Wong, 2001. "Housing Market Bubbles and the Currency Crisis: The Case of Thailand," The Japanese Economic Review, Japanese Economic Association, vol. 52(4), pages 382-404, December.
    • Handle: RePEc:bla:jecrev:v:52:y:2001:i:4:p:382-404
    DOI: 10.1111/1468-5876.00202
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    Cited by:

    1. Gerardo Alfonso Perez, 2021. "Short-Term Event-Driven Analysis of the South-East Asia Financial Crisis: A Stock Market Approach," Economies, MDPI, vol. 9(4), pages 1-30, October.
    2. Sun Qian & Tang Yong & Yang Aimee, 2017. "The Spatial Statistics Analysis of Housing Market Bubbles," Journal of Systems Science and Information, De Gruyter, vol. 5(3), pages 250-266, June.
    3. Hui, Eddie C.M. & Zheng, Xian & Wang, Hui, 2010. "A dynamic mathematical test of international property securities bubbles and crashes," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(7), pages 1445-1454.
    4. Xu, Xiaoyue & Mi, Anran & Li, Xiuting & Li, Xuerong & Dong, Jichang, 2024. "Bad news travels fast: Network analysis of the Chinese housing market connectivity," China Economic Review, Elsevier, vol. 84(C).
    5. Fengyun Liu & Honghao Ren & Chuanzhe Liu & Dejun Tan, 2022. "Formation of Financial Real Estate Risks and Spatial Interactions: Evidence from 35 Cities in China," JRFM, MDPI, vol. 15(12), pages 1-21, December.
    6. Nan-Kuang Chen & Charles Leung, 2008. "Asset Price Spillover, Collateral and Crises: with an Application to Property Market Policy," The Journal of Real Estate Finance and Economics, Springer, vol. 37(4), pages 351-385, November.
    7. Qin Xiao, 2010. "Crashes in Real Estate Prices: Causes and Predictability," Urban Studies, Urban Studies Journal Limited, vol. 47(8), pages 1725-1744, July.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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