Greenspan Hopeful of US Recovery as Business Bounces Back

23 April 2002

Pointing to “early signs of a recovery in capital investment”, Federal Reserve chairman Alan Greenspan declared that the US economy could soon emerge from what has proved to be a particularly gentle recession.

In a speech to the Institute of International Finance in New York, Greenspan explained that the bounce back in business expenditure was vital to recovery, since consumer spend did not slide during the downturn. “It is left for capital investment to carry this economy forward,” he opined.

Key to the swift recovery of business, said Greenspan, is the widespread access to new technology providing up-to-date information, enabling a swifter response to early signs of a slowdown than before (by reducing inventories, for example).

“Today, businesses have large quantities of data available virtually in real time,” the Fed chairman continued. “As a consequence, although their ability to anticipate changes in demand seems little improved, they nonetheless address and resolve economic imbalances far more rapidly than in the past.”

Data sourced from: The Washington Post Online; additional content by WARC staff