An interpretation that therefore offers itself is one of reallocation costs during crisis. As a crisis hits an economy, a substantial share of resources become unemployed, which creates profit opportunities for entrepreneurs to the extent that these resources become cheaper. Yet, whether or not this happens and at which speed existing firms and new entrants can reallocate resources depends on the regulatory framework. Licensing requirements and similar business regulations constitute entry barriers that prevent entrepreneurs from seizing legal opportunities and thereby limiting the economic and social losses during crises. Unstable monetary policies and inflationary interventions prevent the formation of precise price expectations, thereby increasing uncertainty, which would also hold back new investments (Friedman, 1962). Finally, labour market regulations can make it both more expensive and risky to hire new employees, providing a third channel through which deficient or inefficient regulations significantly increase the transaction costs of reallocation. Consistent with the evidence, this does not prevent a crisis from occurring, but limits its extent as more firms in a flexible economy can react faster and in a more economical way to the challenges and opportunities created by the crisis.

LOL

The silence is deafening.

Quote from: Classic Mordo on February 14, 2015, 08:31:24 AM

Quote from: Meta Cognition on February 14, 2015, 03:41:08 AM

The silence is deafening.

I mean this in the nicest possible way, but I can't say I'm surprised. You have a tendency to post the same or similar threads with a lot of economic/political jargon which can put off a lot of users, including myself.

Just a little friendly advice from one user to another.

That's not even what I mean. It feels like the entire board is a bit dead, recently.