> Not all bubbles have negative consequences for the economy
Unless we are using a different definition of "bubble" than it would seem (to me) most people intend when they use that word, this is a factually incorrect statement.
If widespread misallocation of investment capital does not "hurt" the economy, then what does? If capital is invested with a positive outcome for the wrong reasons, then that certainly would not fit the definition.
First applicable definition from a google search:
Bubble: used to refer to a significant, usually rapid, increase in asset prices that is soon followed by a collapse in prices and typically arises from speculation or enthusiasm rather than intrinsic increases in value.
Unless we are using a different definition of "bubble" than it would seem (to me) most people intend when they use that word, this is a factually incorrect statement.
If widespread misallocation of investment capital does not "hurt" the economy, then what does? If capital is invested with a positive outcome for the wrong reasons, then that certainly would not fit the definition.
First applicable definition from a google search:
Bubble: used to refer to a significant, usually rapid, increase in asset prices that is soon followed by a collapse in prices and typically arises from speculation or enthusiasm rather than intrinsic increases in value.