Major Concepts In Economics: What Is Malinvestment?

J.C. Hewitt’s answer is correct. The Austrian School of Economics invented the term (I think) and they focus on Monetary Policy, where malinvestment means credit is too cheap, and prices are distorted by cheap credit, and the pricing system cannot signal entrepreneurs how to appropriately invest. Thus, they invest poorly. 

The term has evolved to be used in a more colloquial sense where  malinvestment can be accomplished through:

In other words, it can represent any action by the government that distorts the some segment of the economy, including but not limited to cheap credit.

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