IDEAS home Printed from https://ideas.repec.org/a/fip/fednci/y2004imaynv.10no.6.html
   My bibliography  Save this article

What investment patterns across equipment and industries tell us about the recent investment boom and bust

Author

Abstract

A study of capital expenditure trends identifies investment in information technology as a major factor in the 1990s boom and subsequent bust. Spending on computers and software, fueled by Y2K preparations and the rise of the Internet, drove investment growth in the late 1990s but slowed in 2000, while overly optimistic profit expectations by communications industries likely prompted an unsustainable investment surge in 2000.

Suggested Citation

  • Jonathan McCarthy, 2004. "What investment patterns across equipment and industries tell us about the recent investment boom and bust," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(May).
    • Handle: RePEc:fip:fednci:y:2004:i:may:n:v.10no.6
    as

    Download full text from publisher

    File URL: https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci10-6.pdf
    Download Restriction: no
    File URL: https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci10-6.html
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Karl Whelan, 2000. "A guide to the use of chain aggregated NIPA data," Finance and Economics Discussion Series 2000-35, Board of Governors of the Federal Reserve System (U.S.).
    2. Eric French & Thomas H. Klier & David B. Oppedahl, 2002. "Is there still an investment overhang, and if so, should we worry about it?," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue May.
    3. Kevin J. Stiroh & Dale W. Jorgenson, 1999. "Information Technology and Growth," American Economic Review, American Economic Association, vol. 89(2), pages 109-115, May.
    4. Charles Steindel, 1995. "Chain-weighting: the new approach to measuring GDP," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 1(Dec).
    5. Kevin J. Stiroh, 2001. "What drives productivity growth?," Economic Policy Review, Federal Reserve Bank of New York, issue Mar, pages 37-59.
    6. Kevin L. Kliesen, 2003. "Was Y2K behind the business investment boom and bust?," Review, Federal Reserve Bank of St. Louis, vol. 85(Jan), pages 31-42.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kevin L. Kliesen, 2003. "Was Y2K behind the business investment boom and bust?," Review, Federal Reserve Bank of St. Louis, vol. 85(Jan), pages 31-42.
    2. Cogley, Timothy, 2005. "How fast can the new economy grow? A Bayesian analysis of the evolution of trend growth," Journal of Macroeconomics, Elsevier, vol. 27(2), pages 179-207, June.
    3. Michael R. Pakko, 2002. "What Happens When the Technology Growth Trend Changes?: Transition Dynamics, Capital Growth and the 'New Economy'," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 376-407, April.
    4. Ark, Bart van, 2000. "Therenewal of th old economy: Europe in an internationally comparative perspective," CCSO Working Papers 200012, University of Groningen, CCSO Centre for Economic Research.
    5. Mihir A. Desai & Austan D. Goolsbee, 2004. "Investment, Fiscal Policy, and Capital Overhang," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(2), pages 285-355.
    6. Karl Aiginger & Michael Landesmann, 2002. "Competitive Economic Performance: The European View," WIFO Working Papers 179, WIFO.
    7. Karen E. Dynan & Douglas W. Elmendorf, 2001. "Do provisional estimates of output miss economic turning points?," Finance and Economics Discussion Series 2001-52, Board of Governors of the Federal Reserve System (U.S.).
    8. Karl Whelan, 2002. "Computers, Obsolescence, And Productivity," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 445-461, August.
    9. Karl Whelan, 2002. "Some New Economy Lessons for Macroeconomists," Recherches économiques de Louvain, De Boeck Université, vol. 68(1), pages 21-36.
    10. Diane Coyle & Jen‐Chung Mei, 2023. "Diagnosing the UK productivity slowdown: which sectors matter and why?," Economica, London School of Economics and Political Science, vol. 90(359), pages 813-850, July.
    11. Harald Edquist & Magnus Henrekson, 2006. "Technological Breakthroughs and Productivity Growth," Research in Economic History, in: Research in Economic History, pages 1-53, Emerald Group Publishing Limited.
    12. Hirokazu Ishise Nao Sudo, 2013. "Inventory-Theoretic Money Demand and Relative Price Dynamics," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(2-3), pages 299-326, March.
    13. Aaron Steelman & John A. Weinberg, 2015. "A \\"New Normal\\"? The Prospects for Long-Term Growth in the United States," Annual Report, Federal Reserve Bank of Richmond, pages 4-27.
    14. Silvana Tenreyro & Gregory Thwaites, 2016. "Pushing on a String: US Monetary Policy Is Less Powerful in Recessions," American Economic Journal: Macroeconomics, American Economic Association, vol. 8(4), pages 43-74, October.
    15. Simon Porcher, 2013. "Regulation and ICT capital input: empirical evidence from 10 OECD countries," Chapters, in: Mehmet Ugur (ed.), Governance, Regulation and Innovation, chapter 7, pages 182-196, Edward Elgar Publishing.
    16. Jun Ma & Mark E. Wohar, 2013. "An Unobserved Components Model that Yields Business and Medium-Run Cycles," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(7), pages 1351-1373, October.
    17. Javier Barbero & Ernesto Rodríguez-Crespo, 2022. "Technological, institutional, and geographical peripheries: regional development and risk of poverty in the European regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 311-332, October.
    18. Yang Liu & Yaojun Fan & Yifan Wang & Jiayu Huang & Hu Xun, 2024. "City innovation ability and internet infrastructure development: Evidence from the “Broadband China” policy," Bulletin of Economic Research, Wiley Blackwell, vol. 76(1), pages 121-146, January.
    19. Basu, Susanto & Fernald, John G. & Shapiro, Matthew D., 2001. "Productivity growth in the 1990s: technology, utilization, or adjustment?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 55(1), pages 117-165, December.
    20. Nicholas Bloom & Charles I. Jones & John Van Reenen & Michael Webb, 2020. "Are Ideas Getting Harder to Find?," American Economic Review, American Economic Association, vol. 110(4), pages 1104-1144, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednci:y:2004:i:may:n:v.10no.6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gabriella Bucciarelli (email available below). General contact details of provider: https://edirc.repec.org/data/frbnyus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.