Edward L. Glaeser and Charles G. Nathanson: An Extrapolative Model of House Price Dynamics: “A modest approximation by homebuyers leads house prices to display three features that are present in the data but usually missing from perfectly rational models… …momentum at one-year horizons, mean reversion at five-year horizons, and excess longer-term volatility relative to fundamentals. … Continue reading Morning Must-Read: Ed Glaeser and Charles Nathanson: An Extrapolative Model of House Price Dynamics