In the remainder of my talk today, I wish to explore more fully this question of a capital stock overhang. Along the way, I will be laying out some analytical distinctions that are important to understanding exactly what we mean when we talk about an overhang of capital.
At the same time, I will try to demonstrate why a capital overhang is so difficult to identify and estimate in practice. I plan to give some special attention to those high-tech industries in which the turnabout in investment spending has been the most dramatic this past year, notably telecommunications industries.