Vocabulary

deregulation – дерегулирование (разгосударствление): уменьшение государственного регулирования для поощрения действий рыночных сил; обычно имеется в виду отмена различных ограничений, лимитов т.п.

digit – цифра; double digit (inflation) – уровень инфляции, выражаемый двузначной цифрой; digital – цифровой; to digitize – преобразовывать в цифровую форму; digitization – преобразование в цифровую форму

non-inflationary growth – темпы роста экономики, не вызывающие рост инфляции

electronic commerce – электронная коммерция, торговля (например, через Интернет)

to restructure (business) – провести реструктуризацию бизнеса или предприятия; restructuring – реструктуризация, реформа

layers of management – уровни менеджмента; middle manager – менеджер (руководитель) среднего звена; top manager – топ-менеджер, руководитель высшего звена

NAIRU (non-accelerating inflation rate of unemployment), natural rate of unemployment – естественный уровень безработицы

to keep (prices) in check – сдерживать рост (цен)

to hike = to raise – повышать; a hike - повышение

Exercises

1. Explain in English what the following mean ( besides dictionaries, you may have to use other sources of information, including the Internet)

full-blown capitalism, freer trade, widespread deregulation, America’s free trade agreement, digital technology, corporate America, electronic commerce, transcendent technology, to restructure business, trade barriers, software, old economists

2. Answer the questions.

   1. How does the new economy differ from the old one?

2. In what way do globalization and information technology affect our life? 3. What role did railroads in the 19^th century and automobiles in the 20^th century play ?

4. What makes the author believe that faster non-inflationary economic growth is possible?

5. How could living standards in developing countries be improved?

3. Do exercise 11 on pages 63-64 in the Krasnov file

New Economy

Around 1995, U.S. economic growth accelerated, driven by faster productivity growth. Since the early 1970s, labour productivity growth had only averaged around 1-1.5% per year, but since 1995, growth has been much faster: 2-2.5%. In addition, unemployment rates were lower than they had been in years and inflation stayed low as well. Already in 1995, Newsweek coined the phrase ‘New Economy’ to refer to this happy state. According to many commentators in the late 1990s, investment in Information technology (ICT) had eliminated economic fluctuations and ushered in a golden age of economic prosperity. The economist Robert J. Gordon referred to it as the Goldilocks Economy.

In the financial markets, the term has been associated with the Dot-com boom. This included the emergence of the NASDAQ as a rival to the New York Stock Exchange, a high rate of IPOs, the rise of Dot-com stocks over established firms, and the prevalent use of such tools as stock options. In the wider economy the term has been associated with practices such as outsourcing, business process outsourcing and business process reengineering.

As with many things that seem too good to last, the recession of 2001 discredited many of the more extreme predictions made during the boom years. However, subsequent research strongly suggests that productivity growth has been stimulated by heavy investment in ICT. Furthermore, continuing strong productivity growth since the 2001 recession makes it likely that some of the gains of the late 1990s may endure.

While many of the more exuberant predictions proved to be wrong, some pundits continue to use the term New Economy to describe contemporary developments in business and the economy.

Notes

1. ICT –Information and Communication Technology

2. Goldilocks economy – экономика, развивающаяся оптимальными темпами (“not too hot, not too cold, just right”- reference to the fairy tale about Goldilocks)

3. NASDAQ (National Association of Securities Dealers Automated Quotations) – Автоматизированные котировки Национальной ассоциации дилеров по ценным бумагам: система компьютеризированной внебиржевой котировки акций в США, организованная в 1971 году

4. As with many things that seem too good to last – Как часто бывает, когда трудно поверить, что такое положение сохранится (так хорошо, что не верится)

5. pundit – ученый, аналитик: ироническое обозначение “теоретиков”, пытающихся объяснить события на финансовых рынках, в экономике