The Stock Market and Investment in the New Economy: Some Tangible Facts and Intangible Fictions

Abstract
Broadly speaking, there are two opposing views about the relationship between the stock market and the new economy. In one view, expressed in the quotation from Vice President Gore, intangible investment helps explain why companies' market values are so much greater than the values of their tangible assets. In the other view, expressed, ironically, by the president of one of the leading firms in the new economy, stock market [End Page 61] valuations have become unhinged from company fundamentals.1 Whatever the motivations of Gore and Ballmer in making these comments, their perspectives frame the debate about the relationship between the stock market and the new economy.

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