Booms and busts are a recurring feature of modern economics, but when an asset’s value becomes overinflated, a boom quickly becomes a bubble.
The two most recent major bubble episodes were the dot-com bubble in the United States (1996-2000) and the housing bubbles that emerged around 2006 in different countries. Both ended in recession – the former relatively mild, and the latter catastrophically bad. Recent, dizzying increases in the stock prices of AI-related companies have now got many investors asking “are we witnessing another asset price bubble?”
