Working Paper: CEPR ID: DP3597
Authors: Jonathan Temple
Abstract: The remarkable economic success of the United States in the 1990s led many observers to talk about a ?New Economy?. This Paper provides an overview of the main issues, including faster productivity growth, the stability of inflation despite very low unemployment, the greater overall economic stability of the 1990s, the role of monetary policy, and the boom in the stock market. The Paper also considers whether or not the acceleration in productivity growth can be sustained, and the possible implications for the rest of the world.
Keywords: new economy; productivity growth
JEL Codes: E66; O40; O51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased investments in information and communication technology (ICT) (L86) | Acceleration in productivity growth during the latter half of the 1990s (O49) |
| Acceleration in productivity growth during the latter half of the 1990s (O49) | Higher real wages (J39) |
| Acceleration in productivity growth during the latter half of the 1990s (O49) | Overall economic stability (E66) |
| Increased investments in ICT (L86) | Improved efficiencies in the use of that capital (G31) |
| Acceleration in productivity growth (O49) | Stability of inflation during a period of low unemployment (E31) |
| Acceleration in productivity growth (O49) | Wage demands lagging (J31) |
| Higher real wages (J39) | Overall economic stability (E66) |
| Acceleration in productivity growth (O49) | Wage inequality (J31) |