Just How New Is The `New Economy'?

The American economy is almost at the halfway mark for 1998 and continues to outperform predictions. The stream of outstanding news--unemployment at a 28-year low, quiescent inflation, stronger than expected growth, rising real wages, and surging share prices--has triggered a heated debate. Is there a new economy shaped by global competition and technological marvels to which such basic economic tenets as the law of supply and demand no longer apply? Or has the "old" American economy been enjoying what Federal Reserve Governor Laurence H. Meyer calls "temporary bliss factors." Has the economy's long-run growth potential permanently improved, or is the economy on a temporary high induced by the economic equivalent of Viagra?

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