http://web.stanford.edu/~piazzesi/illusion.pdf
Using data from the U.K. housing market, they construct a mispricing component of the price-rent ratio that is negatively related to inflation. By their measure, houses thus appear overvalued when inflation is low.
Using data from the U.K. housing market, they construct a mispricing component of the price-rent ratio that is negatively related to inflation. By their measure, houses thus appear overvalued when inflation is low.
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