Two types of asset price bubble bursts: Endogenous and exogenous

Asset price bubbles always end up bursting. Two types of bubble bursts can be distinguished: E ndogenous burst s , which result from a fall in demand for an asset, as the income it provide s becomes too low relative to its price; E xogenous burst s , which result from a shock, usually in the form of an increase in interest rates. We characterise past episodes of bubble bursts. If central banks are no longer going to raise interest rates, then the next one will probably be endogenous.