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Alan Greenspan has stated that central banks should not take actions to burst bubbles.   According to...

Alan Greenspan has stated that central banks should not take actions to burst bubbles.   According to Greenspan, price bubbles are nearly impossible to identify. What is the difference between a price bubbles and a credit bubbles?

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Price bubble are irrational pricing of stocks at such massive forward price multiples which are near to impossible to achieve .It is not supported by fundamental pricing of stocks. Price bubble leads to collapse of equity markets.

Credit bubble are Massive infusion of credit and availability of credit to enterprises who are not able to repay that credit and at point when the multiplier is exausted , The bubble explodes leading to collapse of debt markets.

Both combined together leads to an economic bubble.

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