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The US economy has performed extraordinarily well in the recent years.There has been a wave of innovation associated with both the production and use of information technology that has been translated into improved US economic performance. Hence, the term "new economy" has been used extensively in the end of 1990's to imply the performance of the US economy and in particular the part of its economy that is linked to information and communications technology (ICT). It reflects a view of the new economy has also been employed to signal that the working of the economy may have significantly changed, with rules, principles and institutions different from those of the old economy. There are still ongoing debates in economic thinking on innovation - related issues and has yet to reach consensus. Even the relationship between concentration and innovation is a matter of economic debate. This study considers the different economic characteristics of new economy, draws out the implications of these characteristics for competition policy.

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