Information Technology and the U.S. Economy

Abstract

The starting point for the economic debate is the thesis that the 1990's are a mirror image of the 1970's, when an unfavorable series of «supply shocks» led to stagflation - slower growth and higher inflation . In this view, the development of information technology (IT) is one of a series of positive, but temporary, shocks. The competing perspective is that IT has produced a fundamental change in the U.S. economy, leading to a permanent improvement in growth prospects.