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2018 | 133 | 6 | 1351-1361
Article title

The Mechanism of Transformation of Global Business Cycles into Dynamics of Regional Real Estate Markets

Content
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Languages of publication
EN
Abstracts
EN
The aim of this article is the identification of the occurrence mechanism of sudden quantitative changes in real-estate market prices, which were observed during the global financial crisis. Since such phenomena did not occur to such an intensity during previous crises, it can be assumed that a new economic dynamic type has emerged in real-estate markets. The most promising of the methods of studying such phenomena seems to be the bifurcation method and particularly the catastrophe theory. This study analyzes changes in the prices of residential property based on cusp catastrophes. Empirical data were fit to a stochastic cusp model to visualize the evolutionary path of real estate market. Two other popular models (linear and logistic) were also estimated to compare results. A comparative analysis proved that the cusp model can best explain structural price instabilities in real-estate markets. The results confirmed that the evolution of the real estate market combines two processes: long-term evolution in the area of non-degenerate stability and discontinuous changes in the area of degenerate stability. Structural changes take place in the system only in the area of degenerate stability. The theoretical and practical results show that the catastrophe theory may have predictive potential, which could support traditional methods of predicting changes on real estate markets.
Publisher

Year
Volume
133
Issue
6
Pages
1351-1361
Physical description
Dates
published
2018-06
Contributors
author
  • Institute of Economics, Polish Academy of Sciences, Palace of Culture and Science, pl. Defilad 1, PL-00-901 Warsaw, Poland
author
  • Faculty of Mathematics and Computer Science, University of Warmia and Mazury in Olsztyn, Słoneczna 54, PL-10-710 Olsztyn, Poland
References
Document Type
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.bwnjournal-article-appv133n6p3
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