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Economic Policy for the Information Economy Contents Foreword The Contributors Symposium Summary The Moderators ARMINIO FRAGA, Governor, vii ix xxi Central Bank of Brazil STANLEY FISCHER, First Deputy Managing Director, International Monetary Fund OPENING REMARKS ALAN GREENSPAN, Chairman, 1 Board of Governors of the Federal Reserve System THE "NEW ECONOMY": BACKGROUND, HISTORICAL PERSPECTIVE, QUESTIONS, AND SPECULATIONS J. BRADFORD DELONG, Professor, 11 University of California at Berkeley LAWRENCE H. SUMMERS, President, Harvard University Commentary: ALICE M. RIVLIN, Senior Fellow, 47 The Brookings Institution General Discussion 53 iv Contents HIGH-TECHNOLOGY INDUSTRIES AND MARKET STRUCTURE HAL R. VARIAN, Dean, 65 School of Information Management and Systems, University of California at Berkeley Commentary: ERIK BRYNJOLFSSON, Professor, 103 Massachusetts Institute of Technology Commentary: KEVIN M. MURPHY, Professor, 111 University of Chicago General Discussion TECHNOLOGY, INFORMATION PRODUCTION, AND MARKET EFFICIENCY GENE D'AVOLIO, Ph.D. Candidate, Business Economics, 117 125 Harvard University EFI GILDOR, Principal, Gildor Trading Inc. ANDREI SHLEIFER, Professor, Harvard University Commentary: ROGER W. FERGUSON, JR., 161 Vice Chairman, Board of Governors of the Federal Reserve System Commentary: PHILIPP M. HILDEBRAND, 173 Managing Director and Member of the Executive Committee, Union Bancaire Privée, Geneva, Switzerland General Discussion 181 Contents v REDUCING THE INTERNATIONAL DIGITAL DIVIDE DONALD J. JOHNSTON, Secretary-General, 193 Organization for Economic Co-operation and Development MACROECONOMIC IMPLICATIONS OF THE NEW ECONOMY MARTIN NEIL BAILY, Senior Fellow, 201 Institute for International Economics Commentary: TAKATOSHI ITO, 269 Professor, Institute of Economic Research, Hitotsubashi University Commentary: JOHN B. TAYLOR, 279 Under Secretary for International Affairs, United States Treasury General Discussion MONETARY POLICY IN THE INFORMATION ECONOMY MICHAEL WOODFORD, Professor, 285 297 Princeton University Commentary: ROBERT E. HALL, Professor, 371 Stanford University Commentary: MERVYN A. KING, Deputy Governor, 375 Bank of England General Discussion 383 vi Contents OVERVIEW PANEL MARTIN FELDSTEIN, President and Chief 391 Executive Officer, National Bureau of Economic Research CHRISTIAN NOYER, Vice President, 399 European Central Bank JANET L. YELLEN, Professor, 405 University of California at Berkeley General Discussion 413 The Participants 427