Money Supply and Housing Price Bubbles: Evidence from Micro-Experiments

[...]he assumed a block-recursive structure in which housing variables do not affect monetary policy contemporaneously.In this section, we discuss the effects of money supply on housing price bubbles.[...]to deeply understand the mechanism of how money supply impacts home prices and how the housing price bubbles were generated, the effects of money supply on the traders' bid and offer, trading volumes, traders' earnings are analyzed.According to the concept of real estate asset pricing bubbles, the degree of housing price bubbles can be indicated by the distance between the trading price and the theoretical price.[...]housing price bubbles are larger when increasing the money supply, holding all else constant.