This economic puzzle has many complex pieces – some of them I fear quite inscrutable before the event – and my task today is to assemble for you as coherent as possible a picture of where the Y2K problem appears likely to take us. Please be forewarned that an assessment of this situation has a very short half-life, as conditions are evolving rapidly.
But unlike the example of trade, it may not be possible for the winners to compensate the losers in a way that leaves no-one worse off. In economic jargon, it may not be possible to find a Pareto improving outcome, at least in the narrow monetary sense.