Asset bubble
A sustained run-up in prices—often for housing, equities, or crypto—fueled by credit, optimism, or herding rather than fundamentals alone.
Bubbles are easier to diagnose after they burst: appraisers debate in real time whether high valuations reflect productivity gains or self-reinforcing leverage. When credit tightens, overextended balance sheets can convert paper wealth into deep recessions.
Macro linkage
Monetary ease and expectations intertwine with bubbles; regional data sometimes show which metros inflated fastest. Narratives in works such as “The Economist’s Hour” connect market-efficiency faith with light-touch finance that preceded crises.