Over the past 20 years, the world economy has experienced two revolutions both of which gave rise to asset price bubbles. One was the rise of modern information technology. The other was the credit revolution – the inexorable rise of modern credit markets. Both innovations triggered boom-bust episodes. The credit crisis in particular will have nasty short-term economic consequences. But how about their long-term effects, beyond this downturn?

As far as IT is concerned, I believe that the hype at the time was fully justified – just premature. The internet has revolutionised the media, retailing, banking and our lives in general. Modern telecommunications have had a dramatic impact on our mobility similar to the invention of the automobile or the train. The fact that IT has not had a bigger effect on productivity has probably more to do with the way we measure productivity than with IT itself.