The Economy in Perspective
Thinking productively about monetary policy … Some of the talk about the “new economy” and the “old economy” has been highly productive, spotlighting the dramatic transformation of the U.S. capital stock and the way its growth drives domestic economic activity. Not surprisingly, capital markets reward “new economy” companies, which offer the prospect of explosive growth as they propagate their products and services in the larger, older economy. One need not think that “new economy” firms are valued correctly to understand why spending on their products has risen so dramatically and why investors expect them to generate significant future earnings.
Suggested citation: "The Economy in Perspective," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-09, pp. 01, 09.01.2000.