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Concept
Malinvestment
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Summary
Malinvestment refers to the
Misallocation of resources
in an economy, often due to
Distorted price signals
from
Government Intervention
or
Artificial credit expansion
, leading to investments in projects that are not sustainable or profitable in the long term. This concept is crucial in understanding the causes of
Economic Bubbles
and subsequent busts, as it highlights how
Misguided investments
can lead to significant
Economic Downturns
.
Concepts
Austrian Business Cycle Theory
Economic Bubbles
Price Signals
Credit Expansion
Resource Misallocation
Capital Structure
Entrepreneurial Error
Interest Rates Manipulation
Boom And Bust Cycles
Market Distortions
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