From the Executive Director
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From the Executive Director In Point of Fact |
from NewsLink, Vol. 3 No. 3, Spring 1999
Government failure at the world's center stage
The world has changed its mind about markets and their workings. Before, the focus was on “market failure” and the ways governments needed to fix it through nationalization or regulation. Today, the focus has shifted to “government failure,” what goes wrong or does not work very well when governments try to manage economic affairs directly. Almost everywhere, there is a focus on fiscal prudence. Much of the world is now privatizing. In the United States, this shift has taken the form of deregulation – or at least a move to a sort of “regulation lite,” with greater confidence in the ability of competition to protect consumers and the public weal.
Daniel Yergin, The New Republic, April 26, 1999.The digital economy unleashed
From automated teller machines to supermarket scanners, technology has seeped into nearly every corner of life, helping propel the U.S. economy in its eight-year-old expansion. Generating millions of dollars in corporate spending and creating thousands of new jobs, the high-tech industry accounts for a growing chunk of the economy. “The contribution of computers to GDP growth has been very, very substantial,” said Joel Prakken, chairman of Macroeconomic Advisers. “Spending by businesses on computers has been growing at a ... 60% to 70% annual rate over the past few years.”
Reuters, April 2, 1999.What savings crisis?
Concerns about the personal savings rate are largely misplaced, for they rely on an incomplete picture of the economy. The rate of personal savings, measured for national income purposes...excludes key sources of savings: business savings and the appreciation of stock values, rising housing values and even the appreciation of IRAs. Nor does it include personal claims on private pensions and other forms of deferred compensation.
Mickey D. Levy, Wall Street Journal, February 4, 1999.Alas, the new age dawns upon Professor Solow's computer screen!
“You can see the Computer Age everywhere,” Robert Solow, a Nobel prizewinner from MIT wrote a few years ago, “but in the productivity statistics.” Yet today even renowned skeptics on the subject of technology's contribution to the economy, like Solow, are having second thoughts. The question, posed by economists, is whether higher productivity growth, averaging about 2% in the last three years, is the long-awaited confirmation that the nation's steadily rising investment in computers and communications is finally paying off. “My beliefs are shifting on this subject,” said Solow. “I am still far from certain. But the story always was that it took a long time for people to use information technology and truly become more efficient. That story sounds a lot more convincing today than it did a year or two ago.”
Steve Lohr, New York Times, April 14, 1999.
the guarantee, of further robust
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