Shakeout

Under shakeout is understood in economics a process in which the number of suppliers is reduced in a market.

The shakeout is a market mechanism that eliminates the situation of a so-called over-supply. Some vendors produce goods that are too expensive or for other reasons ( eg, outdated technology, design, no longer meets the demand taste, or changed conditions ) can not be sold. These providers then disappear from the market, either because they are bought from other suppliers because they withdraw from the market and use only other markets or because they file for bankruptcy.

A shakeout may be, inter alia, result of cut-throat competition or ruinous competition may arise as a result of economic crises or be entirely desirable under the heading of structural change and thus forced.

The bankruptcy law has played an important function in market economies in the shakeout.

Market adjustment by means of stabilization or " cleansing crisis "

In the 1930s, it was assumed that necessary " cleansing crisis " and " self-healing forces of the market ," as well as therefore allowed further economic slowdown. Even today, some economists believe that market adjustment means recession, so a cleaning crisis ( crisis or stabilization ), is necessary and is spoken in this context of structural programs or structural adjustment.