Examines at the microeconomic level the assumption that the rate of change of the labor supply to a firm depends on the wage paid by the firm. Concept of dynamic monopsony; Response in terms of the optimal wage path to different product prices; Properties of the optimal path. (From Ebsco)

The author reviews the latest information on productivity and the alternative explanations of the slowdown, which he concludes was partially due to a decline in innovation and work effort and mostly due the post 1973 energy price increases. Identical policy responses to the worldwide inflation were also a reason why so many countries experienced slow growth at the same time, as cyclical productivity declines were added to the structural decline. There are signs that productivity growth is recovering, which gives credence to the view that the temporary shocks of the 1970s were the culprit.

Used properly, the term 'new e-conomy' is warranted. Since 1995, there has been a wave of innovation associated with both the production and use of information technology that has been translated into improved US economic performance. In particular, there has been a substantial acceleration in trend total factor productivity growth. Most of this acceleration actually took place outside of the computer sector. Almost none of the acceleration was cyclical. There is now clear supportive evidence of an acceleration of productivity in service industries that are major purchasers of information technology such as finance and wholesale and retail trade. These gains reflect not only increased investment in information technology but also complementary innovations in business organization and policy. To be sure, as evidenced by recent financial market volatility, there have been speculative excesses, but these should not obscure the fundamental gains that have been made.