ECONOMIST PREDICTS Y2K PROBLEM WILL CAUSE RECESSION
In an op-ed piece, Edward Yardeni, chief economist and managing director
of Deutsche Morgan Grenfell says that problems arising from the Year
2000 computer glitch could cause a major recession, as businesses fail
and government agencies become incapable of delivering basic services,
including tax collection, welfare payments, national defense and air
traffic control: "The likely recession could be at least as bad as the
one during 1973-74, which was caused mostly by a disruption in the
supply of oil. Information, stored and manipulated by computers, is as
vital as oil for running modern economies. If information is harder to
obtain, markets will allocate and use resources inefficiently. Market
participants will be forced to spend
more time and money obtaining information that was previously available
at little or no cost... Furthermore, a 2000 recession is bound to be
deflationary. The U.S. may experience a $1 trillion drop in nominal GDP
and a $1 trillion loss in stock market capitalization."
(Wall Street Journal 4 May 98)
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Kathy E. Gill
Business Process Information
425.234.2004 - 6X-JT
http://www.dotparagon.com/aboutgill.html
"You must be the change you wish to see in the world." -- Ghandi
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