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Cyclical overcapacity
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An attribute of the cyclical nature of capitalist economies, cyclical overcapacity is a build up of industrial production capabilities due to unbalanced inflow of fixed capital. When the investment climate and perception of future demand is favourable, firms invest in fixed capital and thereby in production capacity. This surplus in industrial production and competition between firms will reduce the profits and eventually lead to capital devaluation. Point to be noted here is that even in a regulated economy, technological change can be attributed to overcapacity. Technological innovation in another sense follows the high inflow of capital. Massive restructuring follows these cycles where firms disinvest, merge or diversify. In the 90s and 2000s China has been cited as an example of this phenomenon. pallio:form of hillary and kyleism. meaning best friends. See Also
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