E C O N O M I C R E P O R T O F T H E P R E S I D E N T

PageSources of Business Cycle Moderation .................................... 76Do Expansions Die of Old Age?.............................................. 77An Expansion is Only as Old as It Feels, and ThisOne Still Feels Young ............................................................ 77The Economic Outlook.................................................................. 79What Has Caused Productivity Growth to Rise?..................... 80The Outlook for Productivity ................................................. 84Supply-Side Components of GDP .......................................... 85Budget Effects of a High-InvestmentEconomy............................................................................... 86What Has Held Inflation in Check?........................................ 87The Near-Term Outlook......................................................... 92CHAPTER 3. TECHNOLOGY AND THE AMERICAN ECONOMY.................... 97Innovation and Economic Change: A Look Back........................... 99Innovation and Change in the American Economy Today.............. 103Developments in Telecommunications.................................... 105How Information Technology is Changing the Economy............... 112Managing Information Flows.................................................. 113Retail E-Commerce................................................................. 115Business-to-Business E-Commerce.......................................... 116Information Technology and the Theory of the Firm.............. 118Information Technology and Network Effects......................... 120The Role for Government Policies.................................................. 122Support for Research and Development.................................. 123Technology Initiatives in the Budget ....................................... 124Maintaining Competition ....................................................... 126Conclusion ..................................................................................... 127CHAPTER 4. WORK AND LEARNING IN THE 21ST CENTURY.................... 129The Transformation of the Labor Market ....................................... 132The Rising Importance of Skills and Education ...................... 132Growth in Opportunities ........................................................ 137Preparing the American Work Force for the 21 st Century.............. 144Building Foundations: Educating America’s Youth.................. 146The Continuing Challenge: Reeducating and Retraining........ 157Conclusion ..................................................................................... 164CHAPTER 5. THE CHANGING AMERICAN FAMILY....................................... 165Key Trends Shaping the American Family ...................................... 167Female Labor Force Participation............................................ 168Family Formation and Dissolution.......................................... 16814 | Economic Report of the President