Robert Shiller, the winner of this year's Nobel Prize in economics, has cautioned that increasing equity and property prices could lead to a risky financial bubble that could hurt America's fiscal hopes.

Mr. Shiller, who won this year's Nobel Prize in economics along with two others Americans, said that stock exchanges in many countries were at a high level and property prices had increased steeply over the past few months. He expressed worries that the U. S. economy might not be able to endure the stock market's current boom.

In an interview to German magazine Der Spiegel, Mr. Shiller said, "I am not yet sounding the alarm. But in many countries stock exchanges are at a high level and prices have risen sharply … That could end badly. And the world is still very vulnerable to a bubble."

The Yale University economics professor highlighted increasing prices in the U. S. stock markets and Brazilian property markets as his main areas of concern.

The Dow Jones Industrial Average, the Nasdaq Composite as well as the Standard & Poors 500 reported their third monthly gains in a row in November. So far this year, the benchmark S&P 500 has gained nearly 27 per cent. It is its best yearly gain since 1998.

Financial bubbles develop when investors do not notice that fast increasing property prices do not bare links to market fundamentals. In the most recent incident, the U. S. housing market bubble triggered the 2008 financial crisis.