The Future of Economic Growth

The Future of Economic Growth

As New Becomes Old

The Cournot Centre series

Robert Boyer

In this book, Robert Boyer follows the origins, course and collapse of the ‘new economy’ and proposes a new interpretation of US dynamism during the 1990s. He argues that the diffusion of information and communication technologies is only part of a story that also requires understanding of the transformation of the financial system, the reorganization of the management of firms and the emergence of a new policy mix. The book includes a long-term retrospective analysis of technological innovation, and an international comparison of OECD countries delivers an unconventional and critical assessment of the hope and the hype of the ‘new economy’.

Chapter 1: A Social Construct and an Analytical Challenge

Robert Boyer

Subjects: economics and finance, industrial organisation


INTRODUCTION All concepts, particularly within the field of economics, have a genesis and a history. This is because they result from intellectual and social constructs. The ‘new economy’ does not escape this rule. It is therefore appropriate to spend a little time remembering why it is that this term first arose during the latter half of the 1990s. At the beginning when there was general enthusiasm for the ‘new economy’ (and not only in financial or ICT circles), we find a conjunction of three factors that played a crucial role in spreading the idea that the US economy entered a new phase during the mid-1990s. Note that most of this action transpired in the United States, which therefore became a mandatory point of reference for analysis, with other countries subsequently being compared and benchmarked in reference to the dynamism observed here. This was no coincidence. The US economy had been the first to explore previous growth regimes and to undergo ‘the crisis of Fordism’. As such, it is worth retracing the circumstances and factors that enabled the birth and subsequent diffusion of the belief that an unprecedented growth regime emerged between 1995 and 1997. THE AMERICAN ECONOMY IN THE 1990s WAS NO LONGER THE SAME AS THAT IN THE 1960s From the early 1970s to the mid-1990s US growth was marked by a break with the Fordist era when, thanks to institutionalized compromises inherited from the New Deal and especially from the post-Second World War period, dynamism in productivity and...

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