Overview

shake-out


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The process of removing resources from some sector of the economy. This may occur within firms, or in industries by a reduction on the number of firms. Shake-out is liable to be set off by bad times: cuts in demand induce firms to reduce both their capacity and their labour force, and cuts in profits induce firms to make more effort to remove organizational slack and may compel them to leave an industry.

Subjects: Economics.


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