What economic indicators, or other measures, would one look at to gauge the current state of malinvestment?
My understanding is that malinvestment is typically an imbalance toward capital expenditure, but I’m not familiar enough with the various forms of economic data out there to either find what I need or to put a decent picture together to tell the degree to which the economy is off adjustment.
My thought would be to look at the state of real savings in the economy, then compare that to the ratio of capital expenditure to consumer expenditure. I would think that whatever amount that either consumer expenditure is not sufficient to meet consumer needs, or whatever the difference between both types of expenditure compared with savings, would be a good place to start.
if it was easy to tell it could be flushed out quicker. one of the main points against government intervention is that as prices are distorted idenitifying good and bad investments becomes impossible.
When the government’s, and many private, indices are “dumbed down” to obfuscate any potential warning signs there can be no way to truely know any economic states . I remember that Dow Jones used to be indusrial. As the industrials began to fail they were removed from the index. How can anyone trust a system that changes the rules in the middle of the game. Chaos reigns on the market with actor’s shooting in the dark. There are a few private indices that claim accuracy, but where do their data come from?