Goodbye, Macroeconomics

[Commentary] We are in the midst of a severe economic crisis, the second in about a decade, and the third for Latin America and Asia. It appears that information based economies are volatile. This is partly due to the fundamental price deflation in some of the core information services and products, and partly due to the much greater speed of transactions that outpace the ability of traditional institutions to cope. Information technology contributes to the volatility. But can the same technology also provide new tools for stabilization? The industrial age was the age of massification. Mass production. Mass consumption. Mass media. Mass advertising. But not any more. All around, we see customization and individualization. Macroeconomic activity by government will eventually follow, and become a sub-aggregated 'mezzo' economic policy. Economists, technologists, and policy analysts should work to develop these tools. [Noam is professor of finance and economics at Columbia University.]