What Investment Patterns across Equipment and Industries Tell Us about the Recent Investment Boom and Bust

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Current Issues in Economics and Finance

What Investment Patterns across Equipment and Industries Tell Us about the Recent Investment Boom and Bust

May 2004 Volume 10, Number 6

JEL classification: E22, E32

Author: Jonathan McCarthy

A study of capital expenditure trends identifies investment in information technology as a major factor in the 1990s boom and subsequent bust. Spending on computers and software, fueled by Y2K preparations and the rise of the Internet, drove investment growth in the late 1990s but slowed in 2000, while overly optimistic profit expectations by communications industries likely prompted an unsustainable investment surge in 2000.

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7 pages / 134 kb

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