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Why the New Economy Lives

A new report from the Federal Reserve Bank in Dallas says that despite the meltdown in the dot com world and the ongoing shakeout involving many e-marketplaces, B2B e-commerce is fundamentally sound and continues to drive so-called new economy.

The report, in the latest issue of the bank's "Southwest Economy" newsletter, contends that improvements in efficiency and cost savings in various industries have promoted growth in productivity and should continue to allow the U.S. economy to expand without inflationary pressures.

The piece by senior economist Thomas F. Siems concludes that the long-term beneficiaries of B2B e-commerce will be --surprise -- consumers, who will enjoy lower prices and higher living standards.

The report states that B2B e-commerce constitutes 90 percent of all online business and it "addresses many of the imperfections found in traditional market structures and moves markets closer to perfect competition."

B2B e-commerce will help companies - most notably the stalwarts of the Old Economy - collaborate with suppliers and better manage industry supply chains, the article says, because "accurate information provided in real time through Internet-enabled systems leads to greater production efficiencies."