There is an urgent need for economists to deliver accurate measurements of IT's effect on productivity. If they fail, the results could be catastrophic, according to a report from the International Monetary Fund (IMF).
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The fund's annual World Economic Outlook survey welcomes the fact that IT is contributing to faster productivity growth but says mistakes or delays in measuring "productivity shock" could lead to a marked decline in output and a revival of inflation, as central banks pull the wrong policy levers.
IMF ran three simulations through its Multimod economic simulator in May this year. Assuming a real 0.5 percentage point increase in productivity each year between 2000 and 2010, output would rise dramatically and inflation would dip.
But in the scenario IMF calls "mistakenly perceived new economy" - where the IT effect proves illusory - a sharp reversal takes place around 2005, after inflation begins to take off.
A third scenario, which it calls "delayed awareness", leads to an initial five-year decline in output, followed by a late recovery.
There is uncertainty about the real economic effects of ICT investment at all levels - the first comprehensive impact study of the UK Internet effect is not due until 2002, according to the UK Online strategy announced last month.