The New Economy: And What It Means for America's Future

By Roger Alcaly

Book Overview

How doing business is undergoing a major historic transformation--and why we've only begun our productivity upswing America's economic troubles have had a dramatic impact on how investors view markets and the businesses that drive them. And for now they have overshadowed a profound and ongoing revolution--still taking place after twenty-five years--in the way the economy operates. Just as in past economic revolutions, today's "new economy" emerged from the combination of powerful new technologies--in this case, information and communications technologies--and the methods companies adopted in order to use those technologies effectively. The bubble in technology stocks, its collapse, and the recession that followed are part of a larger pattern of dramatic transformation of markets and businesses. And unlike the bureaucratic companies of the past, today's leading firms are lean, flexible, entrepreneurial, and more productive-and the new ways in which they operate are still evolving. These trends are likely to continue for some time, and their effects are only beginning to be understood. In The New Economy, Roger Alcaly describes how the economy has changed in response to new pressures and opportunities--created by new technologies, global competition, and innovations in world financial markets; he shows how the impact of these changes is real and substantial, and suggests why their biggest impact on the economy may be yet to come.

• Format: Paperback
• Language: English
• ISBN: 0374529221
• ISBN13: 9780374529222
• Release Date: May 2004
• Publisher: Farrar, Straus and Giroux
• Length: 352 Pages
• Weight: 1.54 lbs.
• Dimensions: 8.3" x 1.0" x 5.5"

Customer Reviews

Surge in better US products and services, massive financial structures, US worker productivity trend

1. In 2008, the US economy has been growing at 3 percent, adding 2 million new jobs and inflation remains low at 2.7 percent. 2. The United States is the envy of the industrial world. The new economy is forty years in the making. 3. The average US worker productivity is the highest in the world and growing faster than any wealthy nation, including Japan 4. The United States is the low-cost provide of sophisticated goods where quality is more important than cheap labor. 5. The United States is experiencing an increase in exports of goods and services: computers, legal services, refrigeration, telecommunications, medical products and services, movie making technology, and military, agriculture. 6. US companies are investing in improved technology, robotics, enterprise software, and reengineering their company structure to work more lean. Information technology is giving a competitive advantage. 7. Turn around in the auto industry reflects a 10-year innovation infusion, union contraction, and cost saving process design. GM could escape bankruptcy and emerge as a lean machine, a machine that could change the world. 8. Americans see the US economy as an economic giant. The US exports over 300 billion barrels of oil a year. Tough oil exports are due to start and move the US into the number one oil exporter position. 9. The new economy is a recent phenomenon, driven by a bust in commodity prices, new technology, and massive financial structure. US living standards are the best in the world. China will take twenty years to catch US lifestyle standards. 10. US productivity will continue to grow 1.7% and weather recession pressures. 11. The US is producing more and better products each year. 12. A real estate boom in China would facilitate a new era of global Financial Debt collateralization. The US, 500 trillion dollar derivatives market would grow increasingly larger fueled by a new source of capital flows. 13. New forms of recreation are emerging, such as, the Segway Human transports all terrain. More Americans are enjoying the new medium of transportation and recreation. 14. Outside of any catastrophic event, it is unlikely that the US economic momentum will be hindered. Power law theory seems be pervasive and another sixty years of strong economic growth possible (Diddier). Potential financial catastrophic events in the derivatives market: CMO, CDS, CDO, and Municipal bonds or Financial collapse of Citigroup or Bank of America. 15. Federal Reserve intervention in 1987 and 1997 facilitated pressures that aided in the Stock market crash. The Fed cannot accurately estimate Stock valuations and cause economic stock crashes. How? Interest raising action by the Fed to curb the irrational exuberance associated with rapid price formed a shortage of capital, increased fear about the future cost of money, and trigger tightly networked group consensus through automatic risk systems rules that force massive simultaneous selling. 16. Fed

Excellent analysis of the New Economy

Roger Alcaly, an economist, makes a strong case that information technology, like electricity before it, will support economic growth for decades. Making a parallel with electricity, he notes that for decades, industrialists would electrify only parts of their plants, but only to supplement the older steam engines. It wasn't until the 1920s (40 years after the discovery of electricity), when new immigration laws slowed the arrival of cheap labor, that U.S. industry plugged fully into the new electric technology and reaped the resulting prodcutivity gains.Alcaly suggests that a similar lag is holding up the computer revolution. He argues that the full impact of the New Economy won't be felt until vast sectors upgrade their basic processes, transmitting data over the Internet between suppliers and customers.In his broad survey of an economy in transition, Alcaly ranges from the equity markets to manufacturing and the Federal Reserve. He makes a solid case that a New Economy is upon us, even if its power is hard to measure and predict.