From: Robin Hanson (rhanson@gmu.edu)
Date: Thu Dec 23 1999 - 08:54:12 MST
Max More wrote:
>THE NEW ECONOMY IS STRONGER THAN YOU THINK
>William A. Sahlman
>
>Many policy makers at the Fed contend that the new economy is a fragile
>bubble -- and that with the "irrational exuberance" of the capital
>markets, the sky is going to fall on the U.S. economy. That couldn't be
>further from the truth, according to William Sahlman. As long as the
>government doesn't interfere, he argues, the economy is sturdy, resilient,
>and raring to grow.
>The new economy is strong for several reasons. First, it is based on a
>business model that works. Any business system that relentlessly drives
>out inefficiency, forces intelligent business-process reengineering, and
>gives customers more of what they want will be sustainable.
The new economy could well be stable and strong over a long term, but that
doesn't mean current hitech stock prices are reasonable. The stock market
could crash, and the economy could hit a recession or worse for a while, even
though the new economy continues fundamentally to get more efficient, etc.
Robin Hanson rhanson@gmu.edu http://hanson.gmu.edu
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030
703-993-2326 FAX: 703-993-2323
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