Panelists agree technology developments are driving continued global economic expansion

• Author: Elisa Diehl
• Position: Assistant Editor, IMF Survey
• Pages: 398-400

Page 398

After much of the world was rocked in the 1990s by financial and economic crises, recovery began to take hold in late 1998 and became widespread in 1999. The outlook for the world economy in the near future is generally favorable, with the rate of expansion expected to slow slightly to a more “comfortable” pace, according to panelists at the Nineteenth Annual International Monetary and Trade Conference, sponsored by the Global Interdependence Center in Philadelphia on November 13. They noted that any discussion of the increasingly interdependent global economy must consider how communications technologies are transforming human activities and contributing to ongoing economic growth. Conference participants debated the opportunities and challenges for labor and management, the economic impact of investment in technology, the governance of electronic commerce, and visions of how technology can transform both developing and developed economies.

World economic outlook

Setting the stage for the discussion, Lawrence Klein described the current state of the world economy and the implications of communications technology for its continued expansion. Among the countries that did not succumb to crisis in the 1990s, he said, are Australia, Canada, New Zealand, the United Kingdom, and the United States, which are all performing well. The United States, in particular, he said, was able to keep crisis from engulfing the globe during the 1990s by lending stability to, and providing the engine of growth for, the whole world. What permitted the United States to grow uninterruptedly for 115 months was new technology. Even if world growth slows somewhat, Klein said, the U.S. economy can continue to expand and share the benefits of technology with the rest of the world.

Already, he said, a number of other countries are participating in the technology boom, including Finland and Sweden, which invest heavily in research and development and are well advanced in wireless technology, and Ireland, which has an abundant supply of young, well-educated workers. Countries outside of Europe traveling down the information highway include India, which has a well-educated, English-speaking workforce, and Israel, which is blessed with highly educated immigrants from the former Soviet Union. In Asia, Taiwan Province of China and Korea are leaders in technology and in the creation of hardware. China has less experience with a modern economy but is catching up quickly. According to Klein, the United States will not dominate information technology much longer.

Michael Mussa fleshed out the picture that Klein had sketched of the world economy and its prospects. According to the IMF, he said, we are seeing thePage 399 strongest results in a decade, with growth registering 4^1/2–5 percent and expected to be reasonably well sustained in 2001. The economy is “hitting on all cylinders.” Europe is picking up, Japan is...