> Larry Summers, the former Treasury secretary and now president of
> Harvard University, said in a paper with Bradford de Long, an > economist at
>Berkeley, that the scale of the productivity gains > within the information
>technology sector, and the sector's growing
> importance, would ensure that overall productivity growth remained > elevated.
I'd still love to have the official answer on how one counts productivity
within the information technology sector. Also, I'd've thought it the
benefits of IT within *other* sectors would be a major factor in overall
productivity growth (ie. allowing real-time management of far-flung
sweatshops, lower transaction costs etc). No?
> "The high tech sector is currently very
> weak. . . and we may not see a resumption of very high levels of
> investment for a while," he said.
> "Productivity growth was only 1.4 per cent a year from 1973 to 1995
> and a return to that level is not impossible."
I s'pose once you have continuous capacious speed-of-light calculation and
communication (a) it ain't gonna get any faster, so continued 'overall
productivity growth' is not 'ensured' unless already low cost technology
begins to cost substantially less; and (b) your competitors will have it, too,
so market limits and price ceilings could trump any productivity gains.
> Alice Rivlin, a former vice-chair of the Fed and another Clinton
> appointee, called much of the new economy assumptions (including > those of Mr
>Summers) "hopes and hunches".
I'll wear 'hopes'. 'Hunches' need something more than is offered here, no?'
> Mr Taylor replied that the fiscal risks owed much more to too much > public
>spending.
What's fiscal risks gotta do with anything? It's the very fulcrum of the
private sector which has decked the economy, innit?
> Andrei Shleifer of Harvard University traced how the explosion of
> financial information had led to a deterioration in its quality and
> had encouraged the production of deliberately misleading information > for gullible
>investors.
By the information economist's comfy definitions, information is that which
lessens uncertainty, innit? If you start admitting that information does not
do this, do you have anything worth calling information economics left?
Incidentally, I'm reminded of the 'third umpire' in cricket - slomo television
replays now decide whether a batter (I still think 'batsman' sounds better,
but you gotta move with the times) has made his ground or not. In the old
days, the arguments used to be about inches; now they're about millimetres -
but there are just as many arguments ... but the flesh-and-blood umpire's
atatus (upon which the game much depends) has been irrevocably undermined,
square leg can't field in line with the camera, the square leg umpire can't
stand where he might best decide the issue himself, and the game gets stopped
every time there is a run-out appeal. A big price for no gain, I reckon.
> Mr Summers and Mr DeLong said the principal policy challenges the new
> economy posed were in the field of microeconomics. In particular, > they argued
>that the economics of the information age meant
> powerful but unenduring monopolies were inevitable if profits were to
> be maximised - and challenged antitrust authorities to reconsider > their
>approach to such monopolies.
Information economics still doesn't impress as real-world discipline to me.
It can't define its object, can't quantify what it can't define, and can't
weigh the costs and benefits to the rest of the economy of treating
information as just another commodity in the first place.
Cheers,
Rob.
