malinvestment

Capital that was consumed or malinvestment is destroyed.

Coyote Blog » Blog Archive » Was I Wrong, Or Did Something Change? 2009

Even idle resources can be misallocated - what Hayek and his teacher Ludwig von Mises called "malinvestment" - if invested in activities that don't produce the goods and services the economy needs.

Mises Dailies 2009

The depression was not caused by over investment; manipulation of the money supply led to malinvestment, which is a very different thing.

Tyler's Tough Macro Test, Arnold Kling | EconLog | Library of Economics and Liberty 2009

While a bailout may avert further financial crisis, we'll still be left with the structural problems and delay the necessary deleveraging and purging of what the Austrian economists always referred to as malinvestment (these are capital structures created during a bubble period but unsupported by real demand).

SeekingAlpha.com: Home Page 2009

"This past winter, it seemed like all those decades of what the Austrian economists call malinvestment finally found a place in the light of day," says our intrepid correspondent,

LewRockwell.com 2009

While a bailout may avert further financial crisis, we'll still be left with the structural problems and delay the necessary deleveraging and purging of what the Austrian economists always referred to as malinvestment (these are capital structures created during a bubble period but unsupported by real demand). government is just shifting the burden of failures from bondholders and stockholders to taxpayers.

unknown title 2009

Interest rates were pushed well below their "natural" rate (to use a term coined by Swedish economist Knut Wicksell roughly a century ago), which tends to lead to what Austrian economists call "malinvestment" -- over spending on capital goods.

Center for College Affordability and Productivity Center for College Affordability and Productivity 2008

Instead, the theory pioneered by Ludwig von Mises and F. A. Hayek in the first half of the twentieth century ― a theory that fell into near-oblivion after the Keynesian Revolution in macroeconomics ― is a theory of malinvestment, which is to say, a theory of how an artificially reduced rate of interest leads business firms to invest in the wrong kinds of capital ― in particular, in the longest-lived capital goods, such as residential and industrial buildings, as opposed to inventories and equipment with a relatively short life.

unknown title 2009

This is especially true after asset bubbles have introduced structural excesses in parts of the capital stock -- what the Austrians call "malinvestment" or distortions to the production structure.

Marshall Auerback: Risk of Major Social Upheaval Likely if Bank Bonanza Continues 2009

Austrian school economists call this "malinvestment," and it is an inevitable byproduct of credit bubbles.

Questions for the Fed 2008