--- canonical_url: "https://csls.ca/ipm-archive/issue-8/challenges-of-the-new-economy-for-monetary-policy/" title: "Challenges of the ‘New Economy’ for Monetary Policy" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T05:43:10+00:00" date_modified: "2026-07-13T06:41:31+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Spring 2004" ipm_keyword: - "Banque de France" - "capital deepening" - "ICT" - "inflation" - "monetary policy" - "NAIRU" - "new economy" - "potential output" - "TFP" ipm_research_theme: - "Technology and innovation" ipm_country_focus: - "Europe" - "France" - "International" - "United States" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Challenges of the ‘New Economy’ for Monetary Policy Canonical URL: https://csls.ca/ipm-archive/issue-8/challenges-of-the-new-economy-for-monetary-policy/ # Challenges of the ‘New Economy’ for Monetary Policy [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-8-3-Cette-Pfister.pdf) Cite this article × Cite this article as: Cette, Gilbert, and Christian Pfister. 2004. “Challenges of the ‘New Economy’ for Monetary Policy.” International Productivity Monitor, No. 8 (Spring 2004): 27–36. https://www.csls.ca/ipm-archive/issue-8/challenges-of-the-new-economy-for-monetary-policy/ ## Authors: - Gilbert Cette Banque de France; University of Aix-Marseille II (CEDERS); INSEE-CREST; University of Aix-Marseille II (CEDERS) - Christian Pfister Banque de France ## IPM Issue 8 Spring 2004 pp. 27–36 ## Related IPM articles [Efficiency Adjustment of Hours Worked: Two Possible Modifications of a Jorgensen Production Model Barbara Fraumeni Fall 2025 | IPM Issue 49 | pp. 103–115](https://csls.ca/ipm-archive/ipm-issue-49/efficiency-adjustment-of-hours-worked-two-possible-modifications-of-a-jorgensen-production-model/) [Labour Productivity as a Measure of Technological Change Ulrich Kohli Fall 2025 | IPM Issue 49 | pp. 64–81](https://csls.ca/ipm-archive/ipm-issue-49/labour-productivity-as-a-measure-of-technological-change/) [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [IPM Issue 49 Editors’ Overview Andrew Sharpe, Bart van Ark, Paul Schreyer Fall 2025 | IPM Issue 49 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-49/) [The UK Productivity Slowdown: A Review of Timing, Magnitude, and Drivers Josh Martin Spring 2025 | IPM Issue 48 | pp. 1–34](https://csls.ca/ipm-archive/ipm-issue-48/the-uk-productivity-slowdown-a-review-of-timing-magnitude-and-drivers/) [Appendix: UK Productivity Growth Rates Across Data Vintages and Studies Josh Martin Spring 2025 | IPM Issue 48 | pp. 65–73](https://csls.ca/ipm-archive/ipm-issue-48/appendix-uk-productivity-growth-rates-across-data-vintages-and-studies/) [Opportunities and Risks of Artificial Intelligence for Productivity Francesco Filippucci, Peter Gal, Katharina Laengle, Matthias Schief, Filiz Unsal Spring 2025 | IPM Issue 48 | pp. 1–26](https://csls.ca/ipm-archive/ipm-issue-48/opportunities-and-risks-of-artificial-intelligence-for-productivity/) [Cracking the Productivity Code: An International Comparison of UK Productivity John Van Reenen, Xuyi Yang Spring 2024 | IPM Issue 46 | pp. 60–82](https://csls.ca/ipm-archive/ipm-issue-46/cracking-the-productivity-code-an-international-comparison-of-uk-productivity/) [Are Intangibles Running out of Steam? Bart van Ark, Klaas de Vries, Abdul Erumban Spring 2024 | IPM Issue 46 | pp. 38–59](https://csls.ca/ipm-archive/ipm-issue-46/are-intangibles-running-out-of-steam/) [Appendix: EUKLEMS & INTANProd Industry Coverage and Intangible Asset Treatment Filippo Bontadini, Carol Corrado, Jonathan Haskel, Massimiliano Iommi, Cecilia Jona-Lasinio, Tsutomu Miyagawa Spring 2024 | IPM Issue 46 | pp. 1–4](https://csls.ca/ipm-archive/ipm-issue-46/appendix-euklems-intanprod-industry-coverage-and-intangible-asset-treatment/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn This article examines the implications of the new economy — defined as an acceleration of productivity growth and a disinflationary effect — for the conduct of monetary policy. It analyses how ICT diffusion raises potential output growth through both TFP gains and capital deepening, while temporarily reducing inflationary pressure through lagged wage adjustment. The article argues that in the long run, monetary policy should adjust its inflation target and stabilize both inflation and output in response to new economy developments, but that in the short run, uncertainty about whether a new economy has emerged calls for caution in revising potential output assessments. Cet article examine les implications de la nouvelle économie — définie comme une accélération de la croissance de la productivité et un effet désinflationiste — pour la conduite de la politique monétaire. Il analyse comment la diffusion des TIC accroît la croissance de la production potentielle par les gains de PMF et l’approfondissement du capital, tout en réduisant temporairement les pressions inflationnistes grâce à un ajustement salarial différé. L’article soutient qu’à long terme, la politique monétaire devrait ajuster sa cible d’inflation et stabiliser à la fois l’inflation et la production en réponse aux développements de la nouvelle économie, mais qu’à court terme, l’incertitude quant à l’émergence d’une nouvelle économie appelle à la prudence dans la révision des évaluations de la production potentielle. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-8-3-Cette-Pfister.pdf)