people take comfort in the familiar. Covid-19 has upended many things, but tech-stock prices have proved impressively invulnerable. The Nasdaq, a tech-heavy stock index, has leapt by 25% since the beginning of 2020, taking its total rise over the past decade to over 400%. Were it not for a handful of tech giants like Apple and Microsoft, the500, another share-price index, would be down so far this year. Not since the boom of the late 1990s have technology firms inspired such exuberant trading.
The two booms do share features beyond their stock-price trajectories. Both were sustained by inflows of new money. In the late 1990s discount brokerages and online-trading platforms drew in amateur punters looking to profit off the seemingly one-way market. Today, an army of small-timers trade shares and derivatives on new platforms like Robinhood.
Yet in critical ways the two episodes look profoundly different. As the 1990s dawned economists were hunting in vain for the efficiency-enhancing effects of new technology. Robert Solow, a Nobel prize-winning economist, quipped in 1987 that “you can see the computer age everywhere but in the productivity statistics.” By mid-decade that was no longer the case. Output per hour worked in America rose by more than 3% a year in 1998-2000, a feat the economy had not pulled off since the early 1970s.
Productivity in the 2010s, by contrast, looks pitiful. Annual growth in labour productivity has not risen above 2% since 2010. Growth in total factor productivity, according to data gathered by John Fernald of the Federal Reserve Bank of San Francisco, has been more dismal than ever: just 0.3% on average from 2004 to 2019. If you take the 2010s alone, the average falls to just 0.1%.
Strong labour productivity growth in the 1990s enabled wages to rise without squeezing corporate profits. While the dotcom boom is often remembered for the enormous valuations achieved by profitless upstarts with no clear path into the black, after-tax corporate profits during the decade rose from 4.7% ofin 1990 to 6.7% in 1997, before closing the decade at 5.6%.
RS rstwt
GDP is a bad indicator. New Zealand dared to get rid of it. Other nations should consider the same way seriously.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: CNBC - 🏆 12. / 72 Read more »
Source: BusinessInsider - 🏆 729. / 51 Read more »
Source: CNBC - 🏆 12. / 72 Read more »
Source: BusinessInsider - 🏆 729. / 51 Read more »
Source: BusinessInsider - 🏆 729. / 51 Read more »
Source: CNBC - 🏆 12. / 72 Read more »