Asset Price Bubbles

• How does asset price bubbles cause changes to the economic cycle?:

  • A sustained rise in the prices of financial assets such as housing and equities which takes their values well above long run sustainable levels. Prices can be driven because expectations of future price increases bring new buyers into the market
• How does asset price bubbles cause changes to the economic cycle?:

  • A sustained rise in the prices of financial assets such as housing and equities which takes their values well above long run sustainable levels. Prices can be driven because expectations of future price increases bring new buyers into the market