A Theory of Rational Housing Bubbles with Phase Transitions

We analyze equilibrium housing prices in an overlapping generations model with perfect housing and rental markets. We prove that the economy exhibits a two-stage phase transition: as the income of home buyers rises, the equilibrium regime changes from fundamental only to coexistence of fundamental and bubbly equilibria. With even higher incomes, fundamental equilibria disappear and housing bubbles become inevitable. Even with low current incomes, housing bubbles may emerge if home buyers have access to credit or have high future income expectations. Contrary to widely-held beliefs, fundamental equilibria in the coexistence region are inefficient despite housing being a productive non-reproducible asset

Bubble economics

This article provides a self-contained overview of the theory of rational asset price bubbles. We cover topics from basic definitions, properties, and classical results to frontier research, with an emphasis on bubbles attached to real assets such as stocks, housing, and land. The main message is that bubbles attached to real assets are fundamentally nonstationary phenomena related to unbalanced growth. We present a bare-bones model and draw three new insights: (i) the emergence of asset price bubbles is a necessity, instead of a possibility; (ii) asset pricing implications are markedly different between balanced growth of stationary nature and unbalanced growth of nonstationary nature; and (iii) asset price bubbles occur within larger historical trends involving shifts in industrial structure driven by technological innovation, including the transition from the Malthusian economy to the modern economy

Unique Equilibria in Models of Rational Asset Price Bubbles

Existing models of rational pure bubble models feature multiple (and often a continuum of) equilibria, which makes model predictions and policy analysis non-robust. We show that when the interest rate in the fundamental equilibrium is below the economic growth rate ($R<G$), a bubbly equilibrium with $R=G$ exists. By injecting dividends that are vanishingly small relative to aggregate income to the bubble asset, we can eliminate the fundamental steady state and resolve equilibrium indeterminacy. We show the general applicability of dividend injection through examples in overlapping generations and infinite-horizon models with or without production or financial frictions

The Effect of Social Distancing on the Reach of an Epidemic in Social Networks

How does social distancing affect the reach of an epidemic in social networks? We present Monte Carlo simulation results of a capacity constrained Susceptible-Infected-Removed (SIR) model. The key modelling feature is that individuals are limited in the number of acquaintances that they can interact with, thereby constraining disease transmission to an infectious subnetwork of the original social network. While increased social distancing always reduces the spread of an infectious disease, the magnitude varies greatly depending on the topology of the network. Our results also reveal the importance of coordinating social distancing policies at the global level. In particular, the public health benefits from social distancing to a group (e.g., a country) may be completely undone if that group maintains connections with outside groups that are not following suit

Necessity of Rational Asset Price Bubbles in Two-Sector Growth Economies

We present plausible economic models in which an equilibrium with rational asset price bubbles exists but equilibria with asset prices equal to fundamental values do not. These economies feature multiple sectors with faster economic growth than dividend growth. In our two-sector endogenous growth model, entrepreneurs have access to a production technology subject to idiosyncratic investment risk (tech sector) and trade a dividend-paying asset (land). When leverage is relaxed beyond a critical value, the unique trend stationary equilibrium exhibits a phase transition from the fundamental regime to the bubbly regime with growth, implying the inevitability of bubbles with loose financial conditions

Noncultured Autologous Adipose-Derived Stem Cells Therapy for Chronic Radiation Injury

Increasing concern on chronic radiation injuries should be treated properly for life-saving improvement of wound management and quality of life. Recently, regenerative surgical modalities should be attempted with the use of noncultured autologous adipose-derived stem cells (ADSCs) with temporal artificial dermis impregnated and sprayed with local angiogenic factor such as basic fibroblast growth factor, and secondary reconstruction can be a candidate for demarcation and saving the donor morbidity. Autologous adipose-derived stem cells, together with angiogenic and mitogenic factor of basic fibroblast growth factor and an artificial dermis, were applied over the excised irradiated skin defect and tested for Patients who were uneventfully healed with minimal donor-site morbidity, which lasts more than 1.5 years