This shock was manifest in both the financial markets and in the real economy. It resulted in a sharp correction in equity prices in the technology sector – the bursting of the technology bubble – and, at the same time, it led to a sharp retrenchment in the demand for and production of high-tech equipment.
The economy slowed to the point where real GDP was nearly flat in the second quarter of this year and likely would have been nearly flat in the third quarter, even without the events of September 11.