Signs of a "bubble" are everywhere: soaring house prices; labour shortages; loud demands for wage increases; and reports almost daily of another managing director becoming a multi-millionaire from a stockmarket flotation or a company sale.

Yet there is no sign of the period of record economic growth ending in an uncomfortable crash, with the economy entering 2000 expanding rapidly and another strong year apparently in prospect.

It is the boom which just goes on and on. Each year since 1994 Gross National Product has expanded by an average of 7.5 per cent and the unemployment rate has fallen from 14.7 per cent to 5.1 per cent.

In six years, the economy has transformed from one of Europe's laggards to its best performer.

The economy has expanded by around 7.5 per cent this year and should grow by 6.5 to 7 per cent in 2000, according to most forecasts. All taxpayers will be better when the Budget concessions kick in next April, providing a further boost to consumer spending. Meanwhile, our major export markets in the UK and Continental Europe look set for further recovery next year.

And the cold data hide a complete transformation in our economic "psyche". A host of new companies has sprung up over the last few years, particularly in the high-tech sector where a number of Irish firms are now significant players in international markets, particularly in areas of computer software. The importance of this should not be underestimated; starting a business is now an option which is bringing a new entrepreneurial spirit to the economy.

So why are there so many warnings that the economy is heading for trouble? Partly it is based on the rather unscientific theory that "what goes up, must come down". In the City of London many traders take the simplistic view that boom is bound to end in bust. Looking at the Republic in 1999, they see the UK "Lawson Boom" of the late 1980s - before the economy there headed sharply downwards under the burden of high interest rates. However, the comparison does not really stand up. For one thing, the boom here is based on more stable foundations, in that higher consumer spending reflects increased employment. Productivity - the real engine of economic growth - has soared in recent years, although as the Central Bank has pointed out many indigenous firms have lagged behind. And, crucially, interest rates here cannot be increased unilaterally by the Central Bank.

With only modest increases likely in European interest rates - and the Minister for Finance, Mr McCreevy, bringing in a generous Budget - there are no policy measures in prospect which will bring the economy grinding to a halt. Nor are there any immediate signs of developments in the international economy which would threaten to throw the economy off course. That said, growth is likely to slow somewhat in the course of next year. Labour shortages are now hitting almost every area of industry and will, presumably, limit investment in new projects by both overseas and indigenous firms. Projects already on stream will maintain a strong growth momentum, but difficulty in recruiting staff is now a significant constraint on Irish industry.

Our infrastructure is also struggling to keep pace with the rising level of economic activity. The Government plans to invest billions of pounds in road development under the new National Plan, but planning and implementing such initiatives takes years. Meantime, congestion will remain a problem in our major cities.

Labour shortage - and pressure on wages - are factors which could slow economic growth. But they will not bring the economy crashing to a halt. One concern is that sharp wage rises and increases in other costs to business could gradually erode competitiveness and put a brake on growth in the years ahead.

The Republic is now a region in a wider euro-zone economy. This means that the old constraints of economic policy - such as the current account balance of payments - become less important. And it means that policymakers here cannot act to try to cool the economy as they would have before monetary union.

But it also means that a loss of competitiveness will be punished through a gradual but sustained slowdown in economic growth over a period of years; ahead of the conclusion of a new national agreement, it is too early to assess the extent of this danger. Some kind of economic shock generated from abroad would appear to be the only thing which could bring the economy shuddering to a halt. A collapse in the US stockmarket, for example, could affect many of the hightech companies with major investments here. Indeed, the Asian crisis of 1998 shows how global problems can appear apparently out of nowhere and threaten the international economy.

The danger is that the "bubble" aspects of the economy - particularly soaring house prices and the resulting large mortgages - leave us vulnerable in the face of such a shock. This is the main reason for criticism of the recent Budget, which will put substantial further money in the hands of the better off, thus giving a further boost to consumption and, probably, to house prices.

Yet given a fair international wind, the economy should continue to grow strongly into next year. If our policymakers can cope with the problems of success, and if our luck holds in terms of the international climate, then the Irish success story may have some way to run.