Investments glossary

Irrational Exuberance

Irrational exuberance refers to extreme investor enthusiasm that drives asset prices up to and beyond levels that are not supported by fundamentals. The term is believed to have been coined by former Fed chairman Alan Greenspan in a 1996 speech, The Challenge of Central Banking in a Democratic Society. The speech was given near the beginning of the 1990s dot-com bubble, a textbook example of irrational exuberance:

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