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HKU School of Economics and Finance's “Technology and The Economy” Public Lecture Series

16 Jun 2001

In celebration of the 90th anniversary of the University of Hong Kong, the School of Economics and Finance and the Hong Kong Institute of Economics and Business Strategy are hosting a series of five public lectures by prominent economists on the theme “Technology and the Economy”. The speakers have done seminal work on the impact of technology on the economy and will bring with them a wealth of insights. The talks are of topical interest and relevance to Hong Kong.

Professor Boyan Jovanovic of the University of Chicago and New York University will present the final lecture on “The New Economy and the Stock Market”. The lecture will be held on June 19, 2001 at the Rayson Huang Theatre of the University's main campus. Mr. Andrew Sheng, Chairman of the Securities and Futures Commission, will introduce the speaker.

“The New Economy and the Stock Market”
Professor Boyan Jovanovic, University of Chicago and New York University
June 19, 2001

The new economy has more creative destruction. Firms that enter the stock market have to climb a much higher hurdle to arrive there. The hurdle is part of their intangible capital and their market-to-book values are therefore higher. With entering firms establishing themselves faster than before, prices are more volatile because less is known about the firms' prospects. The rise to the top is more rapid than ever, and several present-day giant firms are younger than past blue-chip companies. Since ideas, which are intangibles, yield positive external effects, they matter more than before. It follows that the private optimal rate of entry is even farther below the social optimal rate of entry. Putting it another way, the time to encourage small business start-ups is now. Stock market bubbles are bad for investors who end up losing their fortunes when the bubbles burst. However, they are good for the economy because they induce more start-ups.

Boyan Jovanovic holds a Bachelor's and Master's degree from the London School of Economics, and a Ph.D. in Economics from the University of Chicago. He has taught at Columbia University, the University of Pennsylvania and Yale University, and is now at the University of Chicago. A fellow of the Econometric Society, he is currently an editor of the Review of Economic Dynamics. He has worked on questions in labor economics, industrial organization, monetary economics and development and growth. Most recently, he has studied how technology affects the economy, with special reference to large technological waves, the stock market, and the performance of different generations of firms.

Members of the Press and interested public are cordially invited to attend. Admission to the public lecture series is free of charge but registration is requested. For further information regarding this public lecture series, please visit: http://www.econ.hku.hk/lecture/public-lecture.html or contact Ms. Mabel Woo, HKU's School of Economics and Finance, at mabel@econ.hku.hk or 2859 2192.