Macroeconomics Presentation by Ly Pham - Fall 2001
An Analysis of "The New Economy: How Real Is It?"

by Peter Coy

Business Week, August 27, 2001

Peter Coy discusses the validity and true meaning of the New Economy in his article titled "The New Economy: How Real Is It?" published in the August 27, 2001 special issue of Business Week. He deems the term actually exists, and that it does not mark the extinction of traditional business structure, and in his words, "Nor was it about price-earnings multiples rising to the ionosphere." Coy defines the New Economy as a period when production experienced the most extensive expansion due to technological innovations, efficient financing, and the surfacing of numerous entrepreneurial talents from deregulation. Conversely, the article mentions the volatility of the New Economy. For example, technology is more vulnerable to fluctuations because ideas and funds are not constant elements of businesses. Furthermore, competition yields unpredictability with deregulation, and globalization would cause every nation to be subjected to the tech slump simultaneously.

The author predicts a sluggish comeback of the market before it levels off. We can certainly relate this functioning to other areas of study, such as Biology. The following are my insights as to how the span of the New Economy can be compared to one of the population growth curves that biologists apply to wildlife. [click for next page]