The new economy

the long version

In 2000 commentators everywhere were hailing the boom in some western economies as the dawn of a new economy. In 2001, with a slowdown biting in the US economy, dot.coms folding and information and communications technology firms feeling the pinch globally, the headline writers have swung the other way, saying that it was all a myth. Was it? The New Economy: Beyond the Hype looks past the elation and gloom to help policymakers think and act with the facts. It explores the causes of the discrepancy in economic performance in the OECD area. It shows that while technology has had a pervasive and profound effect on economies and societies, it alone was not the reason for fast growth. What counts more is how that technology is put to work. The book argues forcefully that whatever the outlook for the business cycle, we are now faced with a new economic environment. It urges policymakers to adopt a comprehensive growth strategy combining five policy areas that can engage ICT, human capital, innovation and entrepreneurship in the growth process alongside policies to mobilise labour and increase investment for the long term. Naturally, good fundamentals -- macroeconomic stability, openness and competition, as well as sound economic and social institutions, and proper social protection -- are a prerequisite for success.