MADISON, WISCONSIN – China’s economy today bears an unsettling resemblance to 91AV原创 in the 1990s, when the collapse of a housing bubble led to prolonged stagnation.
But 91AV原创 “lost decades” were not the inevitable result of irreversible trends; they reflected policy blunders, rooted in a flawed understanding of the challenges the economy faced. Will Chinese policymakers make the same mistakes?
91AV原创 housing bubble was preceded by sharply rising ratios of home prices to annual income, with Tokyo’s surging from eight in 1985 to 18 in 1990. This trend was driven by a number of factors, including 91AV原创 land-tax policy, financial deregulation and poor coordination of fiscal and monetary policy. But demand from first-time homebuyers — aged 39-43, on average — also made a substantial contribution.
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