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Greenspan plugs hi-tech
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September 8, 1999: 12:47 p.m. ET
Fed chief says technology advances could prolong U.S. expansion
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NEW YORK (CNNfn) - Advancements in technology have allowed the U.S. economy to enter its ninth year of uninterrupted economic expansion, and the strides in productivity created can probably keep that expansion going, Federal Reserve Chairman Alan Greenspan said Wednesday.
In prepared remarks of a more historic than market orientation, Greenspan told an audience at Grand Valley State University in Grand Rapids, Mich., that information technology -- particularly the advent of integrated circuits and other rapid forms of technology -- have begun to alter the manner in which companies and people do business and create economic value, "often in ways that were not readily foreseeable a year ago."
That, in turn, has bolstered productivity and allowed faster and cheaper production of goods without passing on price increases to consumers, the Fed chief said.
It has also created new jobs as companies have allowed for changes in inventory management, distribution systems, customer service and other tasks, Greenspan said. That has "sharply reduced the degree of uncertainty confronting business
management," he said.
"Today, economic value is best symbolized by exceedingly complex, miniaturized integrated circuits and the ideas -- the software -- that utilize them," Greenspan said, adding that "Most of what we currently perceive as value and wealth is intellectual and impalpable."
Greenspan didn't use the opportunity to share his views on the current state of the U.S. economy or monetary policy. His last remarks on Aug. 27 raised questions about whether U.S. stocks may be overvalued, which ultimately pushed the Dow Jones industrial average down more than 1 percent.
Greenspan's speech was part of a lecture series sponsored by Grand Valley State and the Gerald R. Ford Museum to commemorate the 25th anniversary of Ford's inauguration as president.
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