Nobel winner warns of financial bubble

An American who won this year’s Nobel Prize for economics believes sharp rises in equity and property prices could lead to a dangerous financial bubble and may end badly.

Robert Shiller, who won the esteemed award with two other Americans for research into market prices and asset bubbles, pinpointed the US stock market and Brazilian property market as areas of concern.

“I am not yet sounding the alarm. But in many countries, stock exchanges are at a high level and prices have risen sharply in some property markets,” Mr Shiller told the German magazine Der Spiegel yesterday.