The New Economy Essay -- essays research papers

THE NEW ECONOMYIt deforms in America. Will it go planetary?It seems almost too good to be true. With the study engine room sector leading the way, the U.S. has enjoyed almost 4% increment since 1994. Unemployment has fallen from 6% to about 4%, and inflation just keeps getting lower and lower. going out food and energy, consumer inflation in 1999 was only 1.9%, the smallest gain in 34 years. This spectacular boom was not built on polecat and mirrors. Rather, it reflects awillingness to undertake massive risky investments in innovative information engineering,combined with a decade of retooling U.S. financial markets, governments, andcorporations to cut costs and increase flexibility and efficiency. The result is the so-calledNew Economy hurried growth and lower inflation. Most corporate executives and policymakers in Europe and Asia, once speculative about the U.S. performance, have taken this lesson to heart. There be still widespreadmisgivings about the U.S. model of f ree-market capitalism. But driven by a thirst forfaster growth, combined with a fear of being left behind, the stay on of the world is starting to embrace the benefits of a technology-driven expansion. But a global New Economy will not happen overnight. True, spending on technology, the most visible part of the New Economy, while not to that degree up to U.S. levels, is on the rise everywhere. Semiconductor sales were up 17% worldwide in 1999, while the number of Internet users in westward Europe and the Asia-Pacific region is expected to much than double over the succeeding(a) five years (chart). Even in a developing awkward such as India, the software industry is growing at a rate of 50% to 60% annually. OLD VIRTUES. But the worldwide proliferation of smooth phones and Web accounts by itself will not bring about a more vibrant global economy. What are also needed are dramatic intensifys in core institutions that will translate technology into faster productivity growth. T hat means financial markets better able to fund innovation, more flexibility in corporations and fatigue markets, a faster pace of deregulation, and change magnitude competition (table). The New Economy is built on old virtues thrift, investment, and let market forces operate, says Treasury Secretary Lawrence H. Summers. There are signs that the process of change has started. With growth picking up in Europe, and Asia emerging fro... ...dents accounted for two-thirds of the growth in science and engineering doctorates at U.S. universities. Most of them planned to stay and work in the country. Like many other aspects of the New Economy, opening up the doors to foreign workers wont come easily in many countries. But the genie is out of the bottle--now that the U.S. has shown that faster growth is possible, no country will be able to resist it. In the end, the benefits will be well deserving the pain. The Road to the New EconomyHeres what countries must do to get a high-productivi ty, low-inflation economy BOOST INVESTMENT SPENDING on information technology as a share of GDP RESTRUCTURE CORPORATIONS to cut costs, amend flexibility, and makebetter use of technology OPEN FINANCIAL MARKETS to call for capital to the best uses DEVELOP VENTURE CAPITAL and IPO markets to sanction innovative companies ENCOURAGE AN ENTREPRENEURIAL CULTURE and make it easier to start saucily businesses INCREASE THE PACE OF DEREGULATION especially in telecom and labormarkets ADJUST MONETARY POLICY to the realities of the New Economy by waiting for inflation to appear before raising interest rates