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The exact cause of economic bubbles is a debated topic among economists. Some experts think that bubbles and inflation are related and are caused by the same factors. Others believe that the bubbles represent an increase or rise over the products or assets fundamental value. Whenever there is a rising movement, it must eventually return to that fundamental value, which is its natural state.
There is another school of thought which believes bubbles are a necessary effect of unreasonably valuing assets based solely on their returns in the recent past without really thinking from a macro perspective or regard for economic fundamentals.
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