A boom is a period of rapid economic growth. Jobs are plentiful, wages rise, and businesses invest. Stock markets climb. Consumers spend with confidence. Booms feel good while they last, and they often last longer than skeptics expect.

But booms plant the seeds of their own end. Easy credit and overconfidence can lead to bubbles. Prices for housing, stocks, or commodities detach from fundamentals. When the bubble pops, the boom turns to bust. The 1990s dot-com boom and the 2000s housing boom both followed this pattern.

Not every boom ends in disaster. Some are driven by real productivity gains, like the post-war expansion in the US or the tech boom in the 2010s. The difference is whether growth is financed by sustainable earnings or by borrowed money and speculation. Telling the two apart in real time is the hard part.

Signs of a boom

• Rising employment and wages
• Strong consumer spending
• Business investment increases
• Asset prices climb
• Credit expands