| BUSINESSWEEK ONLINE : NOVEMBER 15, 1999 ISSUE | ||||||||
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| ECONOMICS
The Economic Scorecard The latest revisions to the economic data raised reported growth in the 1990s, and to a lesser extent in the 1980s. Here's how the new data change the balance of economic power. NEW ECONOMY CLAIM Rapid innovation in information technology has boosted the sustainable rate of growth. CRITICISM The high-tech boom of the 1980s and early 1990s did not appear to increase measured productivity growth. IMPACT OF REVISION Positive. The new data show a mild productivity speed-up in the 1980s, accelerating in the 1990s. SUPPLY-SIDE CLAIM Steep tax cuts are the best way to boost investment and growth. CRITICISM Tax cuts lead to large budget deficits, which sap long-term competitiveness. BOTTOM LINE Mixed. The huge deficits of the 1980s clearly did not drag down growth in the 1990s--but neither did the tax increases of 1990 and 1993. CONVENTIONAL MACROECONOMICS CLAIM Long-term growth depends on increased savings and investment. CRITICISM Historically, most growth comes from technological and entrepreneurial innovation, rather than from a bigger stock of capital. BOTTOM LINE Negative. Despite a low savings rate and big deficits, the economy fared better than predicted in the 1980s and 1990s. DATA: BW _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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RELATED ITEMS Commentary: How Most Economists Missed the Boat CHART: A New Look Back TABLE: The Numbers from Carter to Clinton TABLE: The Economic Scorecard INTERACT E-Mail to Business Week Online | |||
