What is a Tech Bubble?
A tech bubble is a type of market bubble which is characterized by increased speculation in the technology sector, leading to a radical increase in values for companies operating in this sector. Like other bubbles, a tech bubble is a very delicate entity, and it will eventually burst. If the bubble has grown large enough, the bursting of the bubble can drag down the economy as a whole, triggering a minor recession. Speculative bubbles occur when investors believe that there are earnings to be made in a particular sector, and they flock to it with support and funds. The increased investment and speculation leads to an increase in valuation, and eventually stocks in that sector will reach highly inflated prices, which people will continue to pay because they believe that there is still a profit to be made. Classically, companies in the inflated sector may also engage in risky business decisions, which can hasten the collapse of the bubble. One of the most notable tech bubbles occurred in
