Bubble Economy

A bubble economy occurs when asset prices, like real estate or stocks, rise rapidly beyond their intrinsic value due to excessive speculation, optimism, or demand. This creates a "bubble" that appears to be thriving but is unsustainable. Eventually, when investors lose confidence or reality catches up, the bubble bursts, causing prices to plummet. This often leads to economic downturns, financial losses, and a ripple effect across markets. It is fueled by behaviors such as speculation, easy credit, and emotional optimism, illustrating how market psychology can drive temporary overvaluation and subsequent correction.