4 ms·
I don't know much about Austrian economics, but the wiki article about its "malinvestment" concept [1] sounds like it's talking about us: > In Austrian busines
by civilized 4y ago
I don't know much about Austrian economics, but the wiki article about its "malinvestment" concept [1] sounds like it's talking about us:
> In Austrian business cycle theory, malinvestments are badly allocated business investments due to artificially low cost of credit and an unsustainable increase in money supply. Central banks are often blamed for causing malinvestments, such as the dot-com bubble and the United States housing bubble. Austrian economists such as the Swedish central bank's Nobel Memorial Prize in Economic Sciences laureate F. A. Hayek advocate the idea that malinvestment occurs due to the combination of fractional reserve banking and artificially low interest rates misleading relative price signals which eventually necessitate a corrective contraction – a boom followed by a bust.
[1] https://en.wikipedia.org/wiki/Malinvestment https://en.wikipedia.org/wiki/Malinvestment