The recent house price appreciation in the United States has renewed the interest in determining the existence of ”bubbles”. In this paper, we provide a model-free test of rational bubbles and we apply it to the U.S. housing market. Based on the current account identity, we argue that there...

“This book provides an accessible, yet formal framework to understand how housing bubbles arise, their international dimension, their consequences, and ways to prevent them.” Òscar Jordà, University of California, Davis, USA “Basco’s analysis blends, in a very rigorous but enjoyable...