Although econometric models can do a reasonable job of explaining the investment boom of the late nineties, standard models do not fully capture other factors that boosted investment spending during that period, especially in the high-tech sector. For example, the Telecommunications Act of 1996 was intended to increase competition in the telecom sector.
Many firms apparently believed that the dominant market share would go to companies with the biggest networks and the most "cutting-edge" technologies; consequently, investment boomed in the telecom sector. Similarly, deregulation of the electric power grid may have spurred increased investment in power systems.