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Published by: Centre for Islamic Banking and Finance
Published in: 2001
Length: 5 pages
Data source: Generalised experience

Abstract

The New Economic Paradigm may be summarised as the view that globalisation and information technology has led to a surge in the productivity of US workers. This, in turn, has produced a sharp increase in the rate of growth that the US economy can achieve without running up against inflationary capacity limits. At the heart of the New Economic Paradigm is the belief that the economy is in a phase of structural, rather than cyclical, improvement. In this note the impact of the new economy on the recent phenomena of very high price/earnings ratios is discussed.

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Abstract

The New Economic Paradigm may be summarised as the view that globalisation and information technology has led to a surge in the productivity of US workers. This, in turn, has produced a sharp increase in the rate of growth that the US economy can achieve without running up against inflationary capacity limits. At the heart of the New Economic Paradigm is the belief that the economy is in a phase of structural, rather than cyclical, improvement. In this note the impact of the new economy on the recent phenomena of very high price/earnings ratios is discussed.

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