Many argue the bigger the boom the greater the bust. More correct is: The bigger the boom, the greater the mis-direction of production – over consumption, and malinvestment. How devastating the bust becomes depends more on the degree of interventions which impede recovery. Thus, the greater the interventions in the economy that prevent resource re-allocation and adjustment to malinvestments and consumed capital, the more severe the bust, the slower the recovery and the greater the possibility of a renewed boom-bust.
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