Socialist Booms and Busts

  • Mark A. De Weaver


One might think that China would be immune to booms and busts. Under capitalism, the investment cycle appears to be primarily the result of mistakes by the private sector. In a country where the economy is dominated by the state, these should be relatively unimportant. Why should investment still be cyclical? This chapter begins by examining this question from a theoretical point of view, then traces the Maoist-era roots of today’s investment cycle.


Interest Rate Central Planning Great Leap Rail Line Soft Budget Constraint 
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© Mark A. DeWeaver 2012

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