The Business Media and the New Economy

Abstract

The evidence presented in this paper will show that the mythology of the new economy reached unusual heights, even by modern standards. The media correctly and often insightfully reported on a variety of important changes in the economy along the way, but the tendency to exaggerate their impact grew intense. By 2000, new economy rhetoric became a frenzy of half-truths, bad history, and wishful thinking. For the most part, economists did not subscribe to the idea. This in itself does not suggest the idea was wrong. Economic analysis is typically slow to warm to major change, and arguably these days, academic economists are more cautious than ever before. But there was, in truth, little empirical support—at least as yet—for a new economy that was unprecedented in any meaningful way.