[1] In mainstream (neoclassical) economics, under perfect competition relative prices signal to producers and consumers what production or consumption decisions will contribute to allocative efficiency.
[4] Financial speculation, particularly buying or selling assets with borrowed money, can move prices away from their economic fundamentals.
Credit bubbles can sometimes distort the price signal mechanism, causing large-scale malinvestment and financial crises.
Adherents of the Austrian school of economics attribute this phenomenon to the interference of central bankers, which they propose to eliminate by introducing full-reserve banking.
By contrast, post-Keynesian economists such as Hyman Minsky have described it as a fundamental flaw of capitalism, corrected by financial regulation.