THIS ISSUE of the Brookings Papers on Economic Activity contains articles,
reports, and discussions presented at the fifty-fifth conference of
the Brookings Panel on Economic Activity, which was held in Washington,
D.C., on April 1 and 2, 1993. The first article examines a common
critique of American capitalism: that the stock market systematically
undervalues long-term investments and relatively intangible assets. The
second article presents a comprehensive analysis of the September 1992
crisis that led to the breakdown of the European monetary system, and
offers a prescription for reconstituting that system. The third article
takes as its starting point the disappointing recovery from the recent
U.S. recession and looks at what is distinctive about the economy’s behavior
in the periods around recessions and what was special about the
latest recession. The first of three reports in this issue investigates the
role of various factors, includingg overnance, in transformings tate enterprises
in Poland, and suggests implications of the Polish experience
for the privatization process elsewhere in Eastern Europe. The second
report analyzes whether the recent rapid advance in U.S. productivity
is as special as some have suggested. The last report examines the likely
effect of proposed changes in the investment tax credit on future investment,
drawing upon historical evidence about the importance of tax incentives
for equipment investment.
