Could someone clarify what an economic bubble is for me?

Question

I'm writing an essay about the economy, and have done some research on the definition of an economic bubble. To my understanding, a bubble occurs when inflation causes the value of something to increase rapidly, to the point where its price becomes unsustainable. The bubble then bursts when people are unable to keep up with the increased prices, and they realize that the actual value of the item is much lesser. Could anyone tell me if I have this right? I just want to confirm that I am understanding the information I've found. Thank you!

Answer 1

Your almost there it can also be manipulated so prices rise to benefit the manipulators and then they short the bubble and let it burst .

Answer 2

A bubble is most likely to form when the price of something initially increases for a real reason, such as a decline in interest rates or the development of real estate in a region. Momentum traders or speculators  on seeing the price increase will then buy on the assumption that the increase in the price will continue, which then drives up the price even in more until it has lost all relationship to fundamental values. The steady fall in the interest rates from 1980 to the present caused the price of stocks to increase producing two bubbles in the market followed by crashes in 1987 and 2001 and the  very low rates after 9/11 is generally held responsible for the bubble in housing.

Answer 3

I totally agree with 1st answer