Asset price inflation

Asset price inflation is an ongoing price increase of assets such as stocks, bonds, gold and real estate. These markets are not included in the measurement of inflation; there the price development for consumer goods is considered primarily relevant for the average cost of living. While the consumer price index is strongly perceived and the supply of goods can be adjusted accordingly, the price performance of assets is prone to speculative bubbles. What consequences may have a sudden drop in prices, show historical examples such as the tulip mania, the collapse of the Japanese real estate prices in 1990, the bursting of the dotcom bubble in 2000 and the financial crisis in 2007.