Suppressing “Blind” Investment
Bankruptcy plays an important role in free market economies. It is one of the processes of “creative destruction,” to use the term that Schumpeter made famous. Shifts in consumption patterns as well as increasing efficiencies in production processes tend to discipline risk-takers betting on past economic trends. In the more extreme cases, bankruptcy becomes a significant enforcer of the mechanisms of the free market.
KeywordsReal Estate Central Government Industrial Policy Affordable Housing Excess Capacity
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