Harvard economist: Dot-com crash won't repeat

"The IT boom is not coming back," says Dale Jorgenson, a Harvard University professor. "On the other hand we're not in the midst of another dot-com crash."

ASPEN, Colo.--It may seem that there's another Internet bubble afoot, given companies like Shelfari.com--"show off your books!"--receiving venture capital funding.

But an eminent Harvard economist says it's not true. "The IT boom is not coming back," Dale Jorgenson, a Harvard university professor, said on Monday. "On the other hand we're not in the midst of another dot-com crash."

Jorgenson, who gave a morning presentation at this year's Aspen Summit organized by the Progress and Freedom Foundation, displayed a series of graphs showing that while hardware prices have fallen (measured either by computer prices or component prices) in the last few decades, software prices have remained constant when adjusted for inflation.

But back to the crash. Jorgenson said that in the late 1990s, the IT industry has contributed an outside share of productivity gains. Now, he said, it's more evenly distributed: "The character of innovation in the U.S. economy has shifted drastically. It's shifted from IT production, which predominated in the boom, to the successful utilization of IT."

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About the author

Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.

 

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