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| Contributor | Gonzalo Camba-Mendez and Gabriel Quirós, European Central Bank |
| Title of paper | Implications of the "New Economy" for Macroeconomic Policy |
| Abstract | The late nineties in the US was a period of rapid growth, raising asset prices, declining unemployment, and with rising productivity figures explained mainly by the productivity gains that resulted from the ICT industries. The pace of technological change over this same period in Europe was not as fast but it was perceived that similar developments associated with ICT were likely to take place. From a policy perspective, these developments could have two readings. Some might argue that the economy was overheating, or in other words operating well above the non-inflationary speed limit, and would call for restraint and measures to cool off the economy. Others would rather hold the view that the economy was embarking in a new period of high productivity that resulted from the coming to age of the innovations in information and communication, i.e. a "new economy" was born. This paper presents a summary of the main challenges for Macroeconomic Policy in the face of the events of the so-called "new economy". The paper concludes that a number of aspects beyond the technological innovation process warrant a broader concept like "enhanced economic environment". |
| Full document | Implications of the "New Economy" for Macroeconomic Policy |
This page last revised: Monday, 1 July 2002
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