Capital that was consumed or malinvestment is destroyed. ❋ Unknown (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. ❋ Unknown (2009)
The depression was not caused by over investment; manipulation of the money supply led to malinvestment, which is a very different thing. ❋ Unknown (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). ❋ Unknown (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, ❋ Unknown (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.
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 (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.
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. ❋ Unknown (2009)
Austrian school economists call this "malinvestment," and it is an inevitable byproduct of credit bubbles. ❋ Unknown (2008)
Tampering by politicians and central bankers will only make things worse by encouraging "malinvestment," which only prolongs the downturn. ❋ KEVIN CARMICHAEL (2011)
The economic term is "malinvestment," meaning underproduction of what consumers want and overproduction of what they don't want. ❋ Unknown (2010)
When the interest rate is set too low, "malinvestment" results, eventually leading to bust.
The investments in housing represented a classic case of what Mises calls "malinvestment," i.e., the wasteful investment of capital in inherently uneconomic ventures. ❋ Unknown (2009)
But without capital or investment there cannot be, by definition, a problem of "malinvestment" and, therefore, the entire issue of the business cycle becomes irrelevant. ❋ Unknown (2009)
And, they have analyzed secondary effects such as changes in consumption and "malinvestment" (capital structures which are created during the bubble period, but unsupported by real demand). ❋ Unknown (2008)
This is why Wall Street firms that commit "malinvestment" do not deserve bailout - they should be bankrupt according to the nature of economic law. ❋ Unknown (2008)
