This is not by accident. America is the world leader in the technological revolution that is taking place. What we have been experiencing is a by-product of this revolution, namely the rapidity of the economy's adjustment process. In 1999 and early 2000, the economy's capital stock was excessively built up, causing the economy to grow at a rate above its potential. The slowing pace in capital spending that we are now experiencing was necessary if the economy was to progress along a balanced and sustainable growth path.
New technologies allow managers to respond rapidly to real or perceived threats.
The pace of change has increased to such a level that it was not allowing managers enough time to adjust, which in turn has put stress on the confidence level in the economy. These growing pains will be short lived. In fact, there are signs that the economy is dealing with these growing pains quite well. Growth in the US economy in the fourth quarter of 2000 was the slowest in more than five years. Recent economic data reveals that the economy has held up better than expected.