Capital cycle analysis is strongly influenced by J.A. Schumpeter’s notion of creative destruction, namely that competition and innovation produce a constantly evolving economy and spur improvements in productivity. From this perspective, an economic recession serves a useful function as — to use a rather hackneyed image — the forest fire burns away the dead wood and weaker trees, allowing healthy young plants to grow and prosper.
KeywordsInterest Rate Hedge Fund Private Equity Share Price Creative Destruction
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