What causes a boom and bust growth pattern?

A boom and bust growth pattern is typically caused by a combination of factors such as fluctuations in consumer demand, changes in interest rates, and economic policies. During a boom, increased spending and investment lead to rapid economic growth, often fueled by speculation and easy credit. Conversely, a bust occurs when overextension leads to unsustainable debt levels, resulting in reduced spending and investment, layoffs, and a decline in consumer confidence. This cycle can be exacerbated by external shocks or changes in market conditions.