Many experts disagree on how severe the effects of the Y2K problem will be on the U.S. economy.
Estimates range from an almost imperceptible effect to a near-depression scenario.
Though the potential magnitude of the problem is controversial, economists generally agree on the time pattern in which the Y2K problem will affect the economy, believing it will occur in three distinct phases. In this phase, economic activity will increase as businesses and governments add remedial hardware and software expenditures to their existing technology budgets in order to upgrade computer and embedded systems that might fail when the next decade begins. A disruption phase will follow the preparation phase. During, and perhaps shortly before the year 2000, certain vulnerable sectors such as electrical distribution, telecommunications, and air transportation may experience temporary service disruptions as unanticipated Y2K problems occur. Although any lost services are likely to be restored quickly, there may be some one-time economic losses in manufacturing, retailing, services, and other sectors that depend on reliable infrastructure inputs.