Summary and Policy Conclusions

Strong economic growth in some OECD countries over the 1990s, most notably in the United States, led many commentators to speculate that a "new economy" had emerged, largely driven by the spread of information and communication technology (ICT). In particular, economic performance in the United States included a combination of strong output and productivity growth, together with falling unemployment and low inflation. These patterns were all the more surprising for a country already at the technology frontier in many industries, and had no similar counterpart in other affluent OECD economies. Indeed, over the 1990s, large continental European countries, and Japan, experienced slow economic growth and rising, or persistently high unemployment.