Related papers: Unbalanced Growth and Land Overvaluation
We present a general equilibrium macro-finance model with a positive feedback loop between capital investment and land price. As leverage is relaxed beyond a critical value, through the financial accelerator, a phase transition occurs from…
This paper presents a model that studies the impact of credit expansions arising from increases in collateral values or lower interest rate policies on long-run productivity and economic growth in a two-sector endogenous growth economy,…
Markets have internal dynamics leading to excess volatility and other phenomena that are difficult to explain using rational expectations models. This paper studies these using a nonequilibrium price formation rule, developed in the context…
Urban land growth presents a major sustainability challenge, yet its growth patterns and dynamics remain unclear. We quantified urban land evolution by analyzing its statistical distribution in 14 regions and countries over 29 years. The…
Land use expansion is linked to major sustainability concerns including climate change, food security and biodiversity loss. This expansion is largely concentrated in so-called frontiers, defined here as places experiencing marked…
We analyze how equilibrium housing prices are determined in the process of economic development within an overlapping generations model with perfect housing and rental markets. We characterize the rent growth rate in all equilibria. The…
This paper analyses the impact of credit expansions arising from decreases in collateral requirements or more expansionary monetary policies on long-term productivity in a model with endogenous growth. Credit expansions associated with…
Understanding the statistical dynamics of growth and inequality is a fundamental challenge to ecology and society. Recent analyses of wealth and income dynamics in contemporary societies show that economic inequality is very dynamic and…
In this article, we develop a model for the evolution of real estate prices. A wide range of inputs, including stochastic interest rates and changing demands for the asset, are considered. Maximizing their expected utility, home owners make…
A pervasive trend in economic development is the shift from agricultural to manufacturing and finally to service economies. Because the type of employment associated with each sector influences natural resource use this global trend may…
The presented model provides an explanation to several empirically observed phenomena in spatial economics. By representing the system as a complex network of fixed-size land areas connected by trade between harbored activities, city size…
The valuation process that economic agents undergo for investments with uncertain payoff typically depends on their statistical views on possible future outcomes, their attitudes toward risk, and, of course, the payoff structure itself.…
Wetland quality is a critical factor in determining values of wetland goods and services. However, in many studies on wetland valuation, wetland quality has been ignored. While those studies might give useful information to the local people…
The existing theorization of development economics and transition economics is probably inadequate and perhaps even flawed to accurately explain and analyze a dual economic system such as that in China. China is a country in the transition…
We develop a stochastic free-boundary model of housing tenure decisions in markets with high mobility risk, such as areas near military installations. Housing prices and rents follow correlated diffusion processes, and households face an…
Essential to each other, growth and exploration are jointly observed in populations, be it alive such as animals and cells or inanimate such as goods and money. But their ability to move, crucial to cope with uncertainty and optimize…
We study overpricing in a repeated game between two representative agents: a market maker, who controls market liquidity, and a market taker, who chooses trade quantities. Market prices evolve through the endogenous price impact of trades…
Feeding a larger and wealthier global population without transgressing ecological limits is increasingly challenging, as rising food demand (especially for animal products) intensifies pressure on ecosystems, accelerates deforestation, and…
As countries develop, the relative importance of agriculture declines and economic activity becomes spatially concentrated. We develop a model integrating structural change and regional disparities to jointly capture these phenomena. A key…
In economic studies and popular media, interest rates are routinely cited as a major factor behind commodity price fluctuations. At the same time, the transmission channels are far from transparent, leading to long-running debates on the…