THE NEW ECONOMY
It works in America. Will it go global?
It seems almost too good to be true. With the information technology sector leading the way, the U.S. has enjoyed almost 4% growth since 1994. Unemployment has fallen from 6% to about 4%, and inflation just keeps getting lower and lower. Leaving out food and energy, consumer inflation in 1999 was only 1.9%, the smallest increase in 34 years.
This spectacular boom was not built on smoke and mirrors. Rather, it reflects a
willingness to undertake massive risky investments in innovative information technology,
combined with a decade of retooling U.S. financial markets, governments, and
corporations to cut costs and increase flexibility and efficiency. The result is the so-called
New Economy: faster growth and lower inflation.
Most corporate executives and policymakers in Europe and Asia, once skeptical about the U.S. performance, have taken this lesson to heart. There are still widespread......
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