Identification and Prevention
As with all types of economic bubbles, whether real estate bubbles can be identified or prevented is contentious. Bubbles are generally not contentious in hindsight, after a peak and crash.
Within mainstream economics, some argue that real estate bubbles cannot be identified as they occur and cannot or should not be prevented, with government and central bank policy rather cleaning up after the bubble bursts.
Others, such as American economist Robert Shiller of the Case-Shiller Home Price Index of home prices in 20 metro cities across the United States, indicated in May 31, 2011 that a "Home Price Double Dip Confirmed" and British magazine The Economist, argue that housing market indicators can be used to identify real estate bubbles. Some argue further that governments and central banks can and should take action to prevent bubbles from forming, or to deflate existing bubbles.
Read more about this topic: Real Estate Bubble
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