malinvestment
Poorly deployed resources
Malinvestment is an economics term for investment that turns out to be wasteful or unproductive, typically because it was encouraged by distorted market signals such as artificially low interest rates.
The concept is central to Austrian business cycle theory, which holds that credit expansion leads businesses to invest in projects that seem profitable but ultimately prove unsustainable.
The housing bubble represented a massive malinvestment of resources into construction that exceeded actual demand.
Unproven theorizing or risky investment
- overvaluationAppraising too highly
- maniaIntense, consuming obsession
- boomLoud deep sound
- bustFailure or sculpture
crash · tulipmania · dotcom · euphoria · frenzy · exuberance · correction · panic
Twisting from original state
- misjudgmentFaulty evaluation of something
- mismanagementIncompetent handling of responsibilities
- misguidedBased on poor judgment
- inefficientPoor at using resources
imbalance · misuse · disproportion · excess · overreach · subsidized · interventionism
Legal status when insolvent
- defaultPreset standard option
- lossesThings subtracted from standing
- recessionProlonged economic decline
- insolvencyInability to pay debts
collapse · crisis · write-off · liquidation · restructuring · bailout · foreclosure · unemployment
Exceeding sustainable capacity
- depletionReduction of supply
- fragilityEase of breaking
- vulnerabilityOpenness to harm
- overleveragedExcessively burdened by debt
Excessive surplus
- oversupplyExcess beyond demand
- redundancyNeedless duplication
- overproductionExcessive manufacture beyond need
- surplusAmount exceeding requirement
speculation
Unproven theorizing or risky investment
- overvaluationAppraising too highly
- maniaIntense, consuming obsession
- boomLoud deep sound
bust · crash · tulipmania · dotcom · euphoria · frenzy · exuberance · correction · panic · inflation
distortion
Twisting from original state
- misjudgmentFaulty evaluation of something
- mismanagementIncompetent handling of responsibilities
- misguidedBased on poor judgment
inefficient · imbalance · misuse · disproportion · excess · overreach · subsidized · interventionism
bankruptcy
Legal status when insolvent
- defaultPreset standard option
- lossesThings subtracted from standing
- recessionProlonged economic decline
insolvency · collapse · crisis · write-off · liquidation · restructuring · bailout · foreclosure · unemployment · contraction
overextension
Exceeding sustainable capacity
- depletionReduction of supply
- fragilityEase of breaking
- vulnerabilityOpenness to harm
glut
Excessive surplus
- oversupplyExcess beyond demand
- redundancyNeedless duplication
- overproductionExcessive manufacture beyond need
- Austrian economicsHayek, human action, spontaneous order, marginalism
- imbalanceimbalance, disequilibrium, disproportion, asymmetry, lopsidedness
invest, investment, investor, investments, divest, malign, malignant, reinvest, malignancy