To hire a writers, fill the order instructions form & checkout—guaranteed a top college graduate to write your essay & NO AI-Plagiarism in the
final papers! Pursuing an 8-16 week course? The best in completing ace my homework & online class help, will assist you today!
Posted: May 4th, 2025
The most significant economic event in 1990s was the Financial Crisis in East Asian, which also affected the world economy in the next few decades. People probably question the specificity of the East Asian Crisis. Radelet and Sachs (1998.p.1) gave a response to this question: ‘The East Asian financial crisis is remarkable in several ways. The crisis has hit the most rapidly growing economies in the world. It has prompted the largest financial bailouts in history. It is the sharpest financial crisis to hit the developing world since the 1982 debt crisis. It is the least anticipated financial crisis in years.’
We assign writers based on your topic, academic level, and specific needs, ensuring expertise and a perfect match for your project. Our system prioritizes the best fit for quality results. Our advanced matching algorithm considers both subject specialization and your assignment complexity. You can also browse profiles to choose your writer. Students seeking an essay writer benefit from our intelligent matching system that pairs expertise with requirements.
In my view, Asian financial crisis is triggered by real estate bubbles. This paper is organized around the topic ‘the collapse of real estate bubble causes Financial Crisis’ as below. Section 1 introduces what is real estate bubble; what are the factors inducing the occurrence of a real estate bubble; and by what measurements to identify this phenomenon. Then, Section 2 discusses the effects of real estate bubble in Financial Crisis reflect in different approaches: theoretical economic approach statistical data and historical facts. In conclusion, besides summarize the main idea of the overall contents, the exposure of the limitation of the theoretical economic approach will be mentioned.
The real estate bubble, also known as property or housing bubble is considered as an economic bubble, which is also a cyclical phenomenon occurs in the local or worldwide real estate market. Its prime feature is that the valuation of housing is growing swiftly, however, once the people’s financial situation and economic indicators unable to sustain such upward trend of price that follows the collapse of housing pricing. That implies a negative equity in investment for the proprietors. (Investor Dictionary. Com)
There are several factors that induce the burst of the real estate bubble in Asia from 1997 to 1998. The following focuses on several main reasons:
An excessive support of bank lending
Yes, our proofreading service catches errors, improves clarity, and ensures your paper is polished and ready for submission. We enhance your work while keeping your voice intact. Our editors focus on grammar, punctuation, and flow to elevate your academic writing. Upload your draft to get started today. Essay helper professionals refine your writing while maintaining your authentic academic voice.
The developers are unable to cope with the investment of the real estate based on their own capital due to the function of this industry-‘capital-intensive’. Thus, bank lending becomes a major source of funds. Before the mid-90s, the Asian real estate is fairly booming. However, because of the lack of a formal system of banking supervision, banks competed for developers by lowering interest rate. (Koh, Mariano, Pavlov, Phang, Tan and Wachter, 2004)
Government’s improper macro-guidance and control
Government intervention influences the real estate bubble in two perspectives: On the one hand, the land market and economic system is not mature or perfect enough. On the other hand, it is the limitation of the land resources and the market mechanism. Therefore, inappropriate regulation contributes to the growing of the real estate bubble. (An International Comparison of the Real Estate Bubble, 2009)
Some other reasons
We guarantee on-time delivery, but if we miss a deadline, you are eligible for a partial refund or free revisions as compensation. Your time is valuable, and we take deadlines seriously. Our tracking system monitors every order to prevent delays and ensure punctual delivery. Contact support if you have concerns. My assignment help includes strict deadline management to protect your academic schedule.
For example, ‘the relaxed financial environment’; ‘excess international capital flows’ (An International Comparison of the Real Estate Bubble, 2009); excessive amount of house ownership; speculate in purchasing; and ‘bad lending practice’ ( Merriam, 2009)
When economists acknowledge the reasons of bubble burst, they strive to distinguish the breading real estate bubble by the measurements of financial ratios and economic indicators. That aims to prevent the bubble burst.
Housing affordability index
‘Monthly housing affordability index’ (HAI) is a method to identify whether ‘housing is becoming more or less affordable for the typical household. The HAI incorporated changes in key variables affecting affordability: housing prices, interest rates, and income.’ The formula is:
HAI= (Median Family Income/Qualifying Income)*100%
From biology to philosophy, our writers specialize in diverse fields, ensuring your paper is handled by an expert in your subject. We match expertise to your topic for top results. Each discipline requires unique methodologies and terminology that our specialized writers master. Share your discipline details in the order form. Research study bay connects you with subject specialists across all academic disciplines.
HAI ratio denotes the level of affordability. When HAI ratio is high, more people are able to buy a house. (Dr. Econ, 2003) This index facilitates banks to adjust fiscal policy. Assumed that the HAI is high, banks probably adopt liberal policies to extend loans, such as decrease the lending rates.
Price to earnings ratio
The real estate price to earnings ratio (P/E ratio) is the basic measurement to evaluate the comparatively assessment of the equities. This ratio is determined by three factors: The price of purchasing a house; the price of renting a house; and the spending on renting a house. The formula is:
Real Estate P/E Ratio: House price/ (RentExpenses)
This ratio provides an intuitive analysis that how purchasing houses restricts other family’ expenses. (The Real Estate Bubble in the 2000’s-Housing Market Indicators, n.d.)
Use our order form or account dashboard to upload files like rubrics or sources, and your writer will incorporate them seamlessly. This ensures your paper meets all requirements. Multiple file formats are supported, including PDFs, Word documents, and images. Our support team can assist if you need help. Paper writing projects benefit from comprehensive material uploads for precise execution.
Give an example of Washington DC House P/E ratio, which provides an integrated thinking about how purchase interacts with rent. The graph below states a rapidly grow in the ratios, which implies that the speed of raising purchasing price is extremely faster than that of renting price. It seems that such increasing trend will lead to real estate bubble, if none approaches is using to control it. (Eric, 2006)
Some other financial ratios or economic indicators:
Such as ‘real estate price to rent ratio; gross rental yield; ownership ratio; housing debt to income ratio; housing debt to equity ratio; or deposit to income ratio’. (The Real Estate Bubble in the 2000’s-Housing Market Indicators, n.d.)
The growing booming economy of Southeast Asia is known as the ‘the tiger economies’ between the late 90s and early 20s. Counties in Southeast Asia such as Thailand, Malaysia, Singapore, Indonesia, South Korea and Hong Kong (China) were regarded as the states with the most remarkable economic growth worldwide. According to the Gross Domestic Product, it seems that economies of these states increased by 6% to 9% annually. However, good times do not last long, from June 1997 to January 1998, the burst of financial crisis this Asian miracle was dashed to the ground. In the end of 1997, collapses of the stock and currency markets in these state occurred frequently, then, at the beginning of 1998, the stock market lost more than 70% of their profits. (Hill, n.d.)
In the economy system, real estate, compare with other sectors, it is ‘the most highly leverage sector’ that cause a financial crisis of the utmost probability. The increasingly compound of issues or difficulties lead to the real estate deviates from the normal development. That not only generates a breeding ground of the real estate bubble, but also potential risks for financial crisis. Because of the rapidly decrease of real estate price, there was a disastrous loss of bank lending in some Asian countries, which also affects the current monetary assets. (Lanka Rating Agency Limited, n.d.)
Submit a sample of your writing, and we will mimic your style, tone, and vocabulary to make the paper feel authentically yours. This creates a seamless fit with your work. Our writers analyze writing patterns to ensure natural consistency with your previous submissions. Just upload your sample when ordering. Assignment writer experts replicate your voice to maintain consistency across all submissions.
There is a theoretical economic approach (Koh, Mariano, Pavlov, Phang, Tan, and Wachter, 2006) that analysis the correlation between the return of real estate and the fluctuation in the spreading of bank loans. If the numerical value of the correlation is below zero, which indicates a phenomenon of under pricing, which prick up the exacerbation of financial crisis. This assumption could be explained though a formula, that calculates the housing price for trade:
P=V () M (, s ()) +B
Here are the meanings that each symbol denotes: V denotes the basic valuation of a house; M denotes the valuation of bank lending for having a mortgage on a house and the par valuation of bank lending for having a mortgage on a house with certain deposit rate; denotes the intending fluctuating level of a house; s denotes spreading of the bank loan according to certain deposit rate.
Assumed that set an accurate price for mortgage, a house’s marketable valuation is equivalent to par valuation, in addition, price for trade is equivalent to the basic valuation of a house. Suppose that is an independent variable, while s is a dependent variable, thus:
We have tackled everything from quantum mechanics to comparative literature, with writers ready for any academic challenge. No topic is too tough for our team. Our diverse expert pool includes specialists in both theoretical and applied fields. Tell us your needs, and we will deliver. Ace tutors handle even the most challenging subjects with expertise and confidence.
0
= 0
is equivalent to zero, as the spreading of the bank loan modulates according to recoup the bank for the transformations in the value as a result of the ‘put option’ is included in the mortgage lending.
When is equivalent to zero, it means the transformations in the growing fluctuating level of a house ( is completely spread round. However, when is below zero, it means the intending fluctuating level of a house ( has an impact on the covariance of the house return with the market. When the house price changes in response to the spreading:
Our detailed outlines include section breakdowns, key arguments, and source plans, giving you a clear path before writing starts. They are perfect for planning complex papers. A strong outline serves as both roadmap and quality checkpoint for your project. Request one with your order for added structure. Research essay service includes comprehensive outlines to guide your academic writing process.
= 0 ; = 0 ; 0
Thus, if the growing fluctuating level of a house ( is completely spread round, then the correlation between the house price for trade and the spreading of bank loan is equivalent to zero. Furthermore, if this correlation influences the covariance between the house and the whole market is influences, it on the verge of zero.
From another point of view, assumed that the spreading of the bank loan transforms according to under price rather than the intending fluctuating level of a house (, the house price changes in response to the spreading is completely distinctive:
= 0; = 0; and 0
We use strict protocols to protect sensitive orders, ensuring your data and paper details remain private and secure. Your privacy is our priority. All staff sign confidentiality agreements, and data encryption protects every transaction. Rest assured, your information is safe with us. Essay writer confidentiality guarantees complete privacy protection for every academic order.
Therefore, correlation between the house price for trade and the spreading of bank loan is below zero, as following equations:
) 0
These two distinctive house prices which are influenced by default spreading generate an appropriate effect of under price: ‘Under pricing of the default risk in non-recourse lending produces a negative correlation between asset returns and changes in the default spread. Correctly pricing the default risk in non-recourse lending produces no correlation between asset returns and changes in the default spread. Countries that experience under pricing, experience larger market crashes following negative demand shocks.’
On the base of this theoretical economic approach, we could analyze the practical cases, in 1997 Asian Financial crisis, to support the idea that the collapse of real estate bubble causes Financial Crisis
Yes, we craft compelling personal statements for college or job applications, tailored to highlight your strengths and goals. We make your story shine for maximum impact. Our writers understand what admission committees seek and craft narratives that resonate. Share your goals in the order form to get started. Ace my homework extends to application materials that open doors to opportunities.
The financial crisis was began from Thailand and then extended over the whole Asian even the whole world. During that period, the characteristic of its economy is overheating with a deficit of 8% in 1997. The valuation of housing increased swiftly and collapsed swiftly. The main element that generated difficulties for financial institutions was the loans to real estate. (Hunter, Kaufman, and Krueger, 1999)
According to the data from the Investment Property Databank , (Koh, Mariano, Pavlov, Phang, Tan, and Wachter, 2006) the figure below is obtained.
Based on the theoretical economic approach, the numerical value of correlation below zero will lead to a result of under pricing. Such under price may cause a great amount loss of funds, which will finally deteriorate into a financial crisis. From the above figure, Thailand is the typical example that explains the real estate bubble causes financial crisis.
At the beginning of the 1990s, a massive amount of foreign funds continued to flow in the Asia market until the 1997 Asian Financial Crisis started. During that period, the lower deposit interest rate in the country encouraged people to seek investment channels with higher return. Meanwhile, foreign funds benefited the growing of the real estate industry. Additionally, because bank expanded the total amount of lending though decreasing the lending rate, under pricing became uncontrollable. (Koh, Mariano, Pavlov, Phang, Tan, and Wachter, 2006)
Our Ph.D. writers have extensive experience with dissertations, delivering comprehensive research and chapter-by-chapter support. We guide you through every step of the process. From proposal to defense, we provide structured assistance for this culminating academic milestone. Your dissertation will meet the highest academic standards. My assignment help covers extensive dissertation projects with doctoral-level expertise.
In the In 1996, Thailand loaned to the real estate sector US $160 billion, which accounted for 30% to 40% of the total lending. (Mera and Renaud, 2000) The figure below illustrates the amount of funds finance companies lend to industries related to the real estate and manufacturing from 1987 to 1996 in Thailand. It is obviously that the loans to real estate sector rapidly grew between 1989 and 1990, after that the percentage of real estate loan to the total loan maintained at a relative high level, which was between 20% and 30%.
(Source: Bank of Thailand)
Another support case is Malaysia. Between 1992 and 1996, over 70% of the bank lending was invested in real estate sector and stock market. (Mera and Renaud, 2000) The massive amount of funds injected into the real estate industries lead to a rapidly increase in GDP in that period. It is the fact that GDP increased by 40%, 62% 115% and 70% in Malaysia, Indonesia, Philippines and Thailand respectively, that was much greater than that in Germany (19%), United Kingdom(16%) and United States (21.5%). However, this accelerated the formation of the Asian real estate bubble. (Koh, Mariano, Pavlov, Phang, Tan, and Wachter, 2006)
It shown in the below figure that Malaysia, Philippine, and Singapore also generated an negative correlation before the occurrence of financial crisis
To summarize this paper, at the beginning a briefly introduction of the real state bubble is given. In this part it includes the definition, the reasons for breeding real state bubble, for example banks compete by lower lending interest rates to excessive support the real estate industry, and government’s improper macro-guidance and control. Follow that are the measurements of financial ratios and economic indicators, such as housing affordability index and price to earnings ratio, which benefit to identify the signal of bubble burst.
We use advanced plagiarism detection tools like WriteCheck to ensure your paper is 95%+ original, giving you confidence in its uniqueness. A free originality report comes with every order. Every paper is written from scratch with properly cited sources and fresh perspectives. Your paper is crafted from scratch, every time. Paper writing authenticity is verified through multiple plagiarism detection systems for guaranteed originality.
The most important part in the paper is to analyze the relationship between the real estate bubble and the financial crisis to produce a result that the real estate bubble is a factor that triggers the start of the Asian financial crisis. A theoretical economic approach is given with some statistical data, figure and real facts of Asian financial crisis.
However, there some limitations in this theoretical economic approach, that do not agree with the reality. In the above figure, Hongkong and Japan generate positive correlation, according to theory this do not according with under pricing lead to financial crisis.
The fact is that Japan is a typical example to illustrate that governmental action has negative impacts on the real estate industries. The Nikkei 225 index increased rapidly from 10000 to 38916 (peak value) between 1985 and 1989. Facing this, the manager of the Bank of Japan focused on dealing with the inflation rather than shrinking monetary policy, which reflected a decrease trend in housing price. The real estate bubble burst. (Frankel and Tschoegl, 1993) This is one of the limitations of the economic approach, which need further improve.
College students want the best grades in their courses and that’s our FOCUS
Our team consists of outstanding writers who have specialized knowledge in specific subject areas and are scholars experienced in academic research;custom paper writing following assessment task, assignment brief and grading rubric criteria. They hold at least a graduate degree—230 with Masters and MSN qualifications, experts carefully selected and trained to ensure the best final paper quality of our work. .
We’re dedicated to bringing on board top-notch writers who can provide excellent work at prices that make sense for college students; affordable papers for all the course subjects. Our goal? To give you the best bang for your buck without ever compromising on the quality of our essay writing services—or the content of your paper. We give special extra discounts for regular clients and also for long research papers, dissertations and capstone projects. #Don’t forget to use the DISCOUNT code in the COUPONS section of the order form before checking-out!.
The Online Homework Ace Tutors service guarantees that our final work is 100% original, researched, and expertly human-written. Our professional academic writers craft every custom essay and research paper from scratch, ensuring your assignment is tailored to your exact instructions. We are committed to delivering plagiarism-free and AI-free work to each university/college student's 'write my paper' request. To uphold this promise, we check every draft for any possible instances of duplication, wrong citation, grammar errors, and artificiality before we send it to you. Thus, you can always rely on us to write genuine and high-standard content for your essay assignments.
When you trust to place an order with Sample Essays, here is what happens: