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Abstract
We characterise “new economy” shocks as capital or skill augmentation, associated
with the increasing prominence of computers in the capital stock particularly in the US, and
an increase in US investment at least partially financed from abroad. A short-run
comparative static analysis of these shocks using a global comparative static multi-product
macroeconomic model confirms that the US technology shocks alone expand the US and
global economies. The investment shock, however, is associated with a flood of foreign
savings into the US economy the effects of which are more "zero sum” in nature. In the US
the technology shocks alone advantage agriculture and mining by more with capital-skill
complementarity but they are disadvantaged, however, by the real exchange rate effects of
the investment shock. The combined US shocks contract the Canadian and Australasian
economies though the net effects on their agricultures are small and mining gains.