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Global Asset Bubbles

According to, an asset bubble is described here:


As money and trading have become more sophisticated over time, we’ve run into some economic bumps in the road, called bubbles. Bubbles are also known as Economic Bubbles or Asset Bubbles, and they are situations where an asset is at a price range that strongly exceeds the asset’s intrinsic value. A bubble is an economic cycle characterized by rapid escalation of asset prices, followed by a large drop in price (when the bubble pops or bursts). Bubbles are often conclusively identified only in retrospect, once a sudden drop in prices has occurred.


So what causes bubbles? More recent theories on asset bubble formation suggest that they are likely sociologically driven events. While there is no clear agreement on what causes bubbles, there is evidence to suggest that they are not caused by bounded rationality or assumptions about the irrationality of others.


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