Essay - Economics I. Introduction the Industrial Age Was an Age of...

ECONOMICS

*****. INTRODUCTION

The industrial age was an ***** of giant, mega corporations that were ********** bogged down by inefficient and outdated distribution, innovation, and production techniques. By contrast, the information age of the past 20 years or so has brought f*****th a new business form, a fluid congregation of businesses, sometimes highly structured, ***** amorphous, ***** come together on the internet to create value for customers and wealth ***** their shareholders. This phenomen***** has been commonly referred to as "digital capital," "in*****ation technology revolution," or "***** economy." However, as both the Dow Jones Industrial Average ***** the Nasdaq soared to historic highs and record volatility in just a few short years, a widespread ***** quite fundamental disagreement emerged concerning whether or not the high-tech boom was nothing m*****e than one huge bubble.

***** paper analyzes and examines ***** present condition of the United States economy. Part II discusses what phase ***** the business cycle we are in. In Part III, the latest GDP (real and nom*****al) and how it has changed since 1999 are outlined. ***** IV reviews ***** economists are predicting for the current year. In Part V, three events that have occurred or will soon be resolved that likely will affect the ***** in 2003 ***** discussed.

II. WHAT PHASE OF THE BUSINESS CYCLE ARE WE IN?

Business, like all human activities, is a cyclical activity and distinct phases may be recognized. The n*****mal business cycle usually lasts approximately 42 - 54 months. During this time, ***** activity goes from the despair of ***** depths of recession to the euphoria of the peaks of business expansion without end and back again. In this pendulum of activity the main investment vehicles ***** stocks, bonds and commodities - change in ********** perceived value. Presently, the ***** States economy is in a **********r market/recession, ***** exact stage ***** which is unknown.

***** cycles are generally distinguished by six stages. ***** first stage of the business cycle is ***** early part of a recession. Bond yields ***** ***** and prices are positive ***** in a bull m*****rket for *****. Stock prices are down and in a bear market for stocks. Commodity prices are down and are also ***** a ***** m*****rket.

In the second stage of ***** business *****, the recession is deepening. ***** prices are still in a bull market but their upward momentum is slowing. Stock ***** bottom out. This is the start of a bull ***** ***** stocks as investors anticipate the end of ***** *****. Commodity prices continue ***** bear market.

During the third stage of ***** business cycle, the recession ***** ending and the transition into economic expansion is underway. Bonds are in ***** late ***** of their bull *****. Stocks ***** in the accelerating phase of their bull market. Commodities are bottoming ***** and ***** beginning the early phase of ***** bull *****.

The fourth stage of ***** business ***** occurs when ***** ***** is maturing. Bonds ***** their bear market. Stocks continue their bull