New Economy

Created: 2000-04-26
Last Modified: 2000-5-04
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New Economy Forum Briefing

J. Bradford DeLong

May 2000


Standards and Markets


  • For past two generations US Government rule making kept a strategic focus: create and preserve institutional and market openness and lively competition.
  • Consider the rapid expansion of the Internet.
    • Decisions that provided open access for Internet Service Providers and assured a fixed monthly charge for the local modem dial-in to the internet, over the local telephone system, to the local Internet Service Provider -- though the accessed sites were distributed around the globe -- facilitated the rapid residential expansion.
  • Consider the flood of venture capital.
    • The change in what is called the "prudent man rule" permitted pension funds to participate in the venture business. The consequence was a substantial increase in the scale of funds available for entrepreneurial start-ups and innovative undertakings.
  • All market economies require rules of the road;
    • For markets to work there must be rules about property
    • There must also be rules about deal-making
    • The rules for that E-conomy will increasingly define not only how individual markets work, but also how the over-all market economy works.
      • Debate will ultimately be about the regulations and rules that shape the kind of network world we have, what kind of code-constructed realities and businesses we develop, and hence what kind of economy we build.


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Professor of Economics J. Bradford DeLong, 601 Evans Hall, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax

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