Bubble Economy

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Bubble Economy

An economy market in which prices for goods and services rise far above actual values. This trend continues until investors realize just how far prices have risen, usually but not always resulting in a sharp decline. Bubbles usually occur when investors, for any number of reasons, believe that demand in the economy will continue to rise far beyond what is sustainable. This results in the increased prices. See also: Bubble.
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There is, as well, the critical issue of bubble economies, prolonged only by escalating credit creation.
Bubble economies are, of course, familiar developments for economic historians.