Endnotes

¹ Gordon (2000) does not dispute the rise in productivity, but questions the magnitude and importance of New Economy technologies. He finds that the New Economy's effects on productivity growth are largely confined to the durable goods manufacturing sector and are mostly absent in the remaining 88 percent of the economy.

² McConnell and Perez-Quiros (2000) document the 1984:1 break date by testing for the type of structural change described in Andrews (1993) and Andrews and Ploberger (1994).

³ The analysis presented in Koenig, Siems, and Wynne (2002) is updated here to include available GDP data through 2002:4.

⁴ Of course, they are other possible explanations for the economy's increased stability that are not mutual exclusive, such as better monetary policies that have successfully created a low inflation environment, good luck induced stability in final demand, and smaller and fewer price shocks to the economy.

⁵ Economist Adam Smith (1776) argued that private competition free from government regulations allows for the production and distribution of wealth better than government-regulated markets. As Smith said, private businesses organize the economy most efficiently as if "by an invisible hand."

⁶ See Coase (1988).

⁷ See Siems (2001a) for more on why the fundamentals behind B2B e-commerce and its impact on the economy remain strong. While most productivity gains and cost reductions will occur between businesses, the greatest long-term beneficiaries of Internet business solutions will be consumers, who will enjoy lower prices and higher living standards.

⁸ As explained in Siems (2001b), B2B e-commerce and e-marketplaces move many markets closer to the textbook model of perfect competition that can be characterized by many well-informed buyers and sellers, low-cost access to information, extremely low transaction costs, and low barriers to entry.

⁹ Chen and Siems (2001) find that investors reacted favorably to B2B e-marketplace announcements during the July 1999 – March 2000 period, with slightly higher abnormal returns associated with vertical (intra-industry) than horizontal (cross-industry) e-marketplaces.

¹⁰ There are, of course, measurement issues on ICT's impact on economic growth. These issues are complicated further when making international comparisons and are discussed in van Ark (2002).