# overheating

/ˈoʊvɝˌhitɪŋ/ (US) · /ˌəʊvəhˈiːtɪŋ/ (UK) · CEFR C1 · Noun

Source: https://englishreference.com/word/overheating
Updated: 2026-05-08

## Definition

a situation where an economy grows too fast, causing prices to rise and making it hard to keep things stable. It often happens when people want to buy more than businesses can produce.

For teachers: a state in which an economy experiences excessively rapid growth, leading to inflationary pressures and supply shortages. Occurs when aggregate demand exceeds the productive capacity of the market.

## Examples

- The government raised interest rates to prevent the economy from overheating.
- Economists warned that the housing market was overheating after three years of double-digit price increases.
- Central banks often intervene when an economy shows signs of overheating, as the resulting inflation can erode purchasing power and lead to a painful market correction or recession.

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