asset bubble

What is an asset bubble?

We have had numerous asset bubbles in the past. These include the tulip mania, the US housing bubble, and the dot-com bubble. All these asset classes rose in value due to irrational exuberance. However, the same characteristics were in place which drove up the prices. In this article we discuss the reasons for asset bubbles, the reasons for the asset price falls, and the implications of price devaluation. What is an asset bubble? Asset bubbles occur when the asset is …

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