Overheating(redirected from overheats)
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An economy that is growing very quickly, with the risk of high inflation.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Describing an economy that is growing too fast or otherwise unsustainably. Overheating economies tend to crash, experience high inflation, or both. The inflation occurs when the economy's producers are unable to meet demand by expanding production because it is rising too fast. To temper demand, the producers raise prices. Central banks tend to increase interest rates to temper or prevent overheating in domestic economies.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved