Information Age | Many Claims About the New Economy Have Been Exaggerated

The announcement on May 8th [2001] that America’s productivity declined in the first quarter of 2001 at an annual rate of 0.1%, compared with growth of more than 5% during the year to June 2000, is a blow for the information technology (IT)-powered new economy. One by one, its claims to be special are being exposed as myths. Now it seems that the widely-held belief that America’s sustainable rate of productivity growth had doubled to around 3% was also mere myth. That does not mean, however, that the new economy was entirely hot air.

Its cheerleaders have certainly been...

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