Research an investment (could be a public company, private company, government agency, infrastructure project, etc) that you believe meets the definition of a malinvestment (past or present) and argue why you think it’s a misallocation of capital (3-5 sentences).
From what I have researched and witness in the past few months, quantitative easing in the U.S. is a true example of malinvestment. The Federal Reserve is keep the interst low in hopes that it would stimulate some economic growth while also purchasing Treasury bonds. Trillions of dollars are being printed out to support the struggling economy during the covid-19 pandemic.What i am starting to see is that the trillions of dollars isn’t making it into the hands of the everyday people. It is going more to small businesses and big fortune 500 companies, some to which even with the money allocated to them, would not make it. Sometimes, it hard to conceptualize what a trillion dollars is.Somewhere along the lines, we have created an artificial market that we hoped would show a recovering economy but instead, unemployment is up, gdp is down and there is still no true stimulus, despite the efforts of the Federal Reserve.