When Bubble Meets Bubble: Contagion in OECD Countries

Posted: 15 May 2018

Date Written: May 2, 2018


We study the existence and international transmission of housing market bubbles, using quarterly information of twenty OECD countries for the period comprised between 1970 and 2015. We find that housing bubbles are present in all the countries included in our sample. Multiple bubbles are found in all but two of those countries. We find five episodes of transmission. All of them had origin in the US housing bubble preceding the subprime crisis. Most transmissions were to European countries. Notably, the Spanish housing bubble was not a direct consequence of the US housing bubble. Its origin must be found in other causes.

Keywords: Housing Bubbles; International Transmission of Bubbles; Recursive Right-Tailed Unit Root Tests; OECD Countries

JEL Classification: G01; G12; C22

Suggested Citation

Gomez-Gonzalez, Jose Eduardo and Gamboa-Arbelaez, Juliana and Hirs-Garzon, Jorge and Pinchao, Andres, When Bubble Meets Bubble: Contagion in OECD Countries (May 2, 2018). Journal of Real Estate Finance and Economics, Vol. 56, No. 4, 2018, Available at SSRN: https://ssrn.com/abstract=3172198

Jose Eduardo Gomez-Gonzalez (Contact Author)

Banco de la Republica ( email )

Carrera 7 #14-78

Juliana Gamboa-Arbelaez

Central Bank of Columbia ( email )


Jorge Hirs-Garzon

Independent ( email )

Andres Pinchao

Fedesarrollo ( email )

Calle 78 No 9-91
Santafe de Bogota, 75074

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