A Federal Reserve policymaker said Tuesday that she expects the Year 2000 computer bug to take a bite out of the economy the next two years as money and resources are siphoned off to cure it. The Year 2000 computer bug, commonly referred to as the Y2K problem, arises from computer codes that can't comprehend dates beyond 1999. Phillips says that much of the recent improvement in productivity has come from the use of enhanced computer systems. But many firms are putting system upgrades on hold as they concentrate on fixing the Y2K bug.
Productivity is the key factor in a country's economic well-being.
The more productive workers are, the more money they can make. That could shave economic growth by 0.1 percentage points this year and next. I think we'll bounce back,'' she says.