Chapter 40

Policy Issues and the New Economy for Developing and Transition Economies
C.L. Mann
(Institute for International Economics)

This chapter describes what is the New Economy, and reviews research on the magnitude and source of potential benefits from it. It addresses the policy foundations that help create a New Economy. It discusses the digital divide, which is one manifestation of the differential pace of engaging in the New Economy. It presents policy challenges of the New Economy that come from the juxtaposition of a more global marketplace with the national boundaries of policymaker jurisdiction. It considers appropriate government interventions and actions to enhance the probability that countries will enjoy the benefits of the New Economy.