Why the Optimism?

In spite of the recent recession, hopes for the New Economy have been little daunted. Surprisingly robust productivity growth during the recent downturn provides compelling new evidence that something truly fundamental is going on. This Commentary argues that advances in information technology, and their diffusion through the economy, are justifiable reasons for our optimism. Higher productivity growth is not an ephemeral phenomenon but one likely to persist for some time into the future, perhaps even accelerating further.