ABSTRACT
The stock market crash that began in 2000 revealed the equity price runup of the preceding years to be a bubble and wiped out $5 trillion in market capitalization. The ensuing plunge into recession1 exposed the flawed foundations of the ‘New Economy’ boom, and entailed the largest one-year drop-off of investment and GDP growth of the post-war epoch. The subsequent recovery was among the slowest since 1945 in terms of the increase of GDP, investment, and especially of jobs, despite the largest macroeconomic stimulus in US history. Taken together these developments put paid to the hitherto widely accepted view that the rapid expansion of the second half of the 1990s marked an end to long-term slowed growth and set the economy on a new upward path.
