Old Economy

AAA

DEFINITION of 'Old Economy'

A term for the old blue chip industries that enjoyed fabulous growth during the early parts of the century as industrialization around the globe, and particularly in the United States, expanded. Since the new economy has arrived, old economy companies have still experienced growth, but at a declining rate.

BREAKING DOWN 'Old Economy'

The old economy contrasts with the new economy, where technological innovation is key. Although old economy firms have been changed dramatically by technology, there is a limit to how much technology can continue to improve the industry.

Industries that are commonly considered to be involved in the old economy are energy, steel, and automobile manufacturers.

RELATED TERMS
  1. Social Sciences

    A group of academic disciplines that examine society and how ...
  2. Brick And Mortar

    A traditional "street-side" business that deals with its customers ...
  3. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  4. New Paradigm

    In the investing world, a new paradigm is a totally new way of ...
  5. New Economy

    A buzzword describing new, high-growth industries that are on ...
  6. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
Related Articles
  1. Investing Basics

    How Dividends Work For Investors

    Find out how a company can put its profits directly into your hands.
  2. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI US 1000

    Find out about the PowerShares FTSE RAFI U.S. 1000 ETF, and explore detailed analysis of the fund that invests in undervalued stocks.
  3. Mutual Funds & ETFs

    ETF Analysis: First Trust Dorsey Wright Focus 5

    Take a closer look at the First Trust Dorsey Wright Focus 5 ETF, a unique and innovative fund of funds based on momentum and relative strength.
  4. Mutual Funds & ETFs

    ETF Analysis: Schwab US Large-Cap

    Discover how the Schwab U.S. Large-Cap exchange-traded fund is managed, the index it tracks and the investors for which it is most appropriate.
  5. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  6. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Low Volatility

    Find out about the PowerShares S&P 500 Low Volatility ETF, and learn detailed information about this fund that provides exposure to low-volatility stocks.
  7. Markets

    The 5 Biggest Canadian Insurance Companies

    Learn more about the insurance industry as a whole, how it functions in Canada, and the five largest Canada-based insurance companies.
  8. Mutual Funds & ETFs

    ETF Analysis: iShares Core High Dividend

    Discover how the iShares Core High Dividend ETF is managed, which index it tracks, and for whom it is most suitable as part of an overall portfolio allocation.
  9. Mutual Funds & ETFs

    ETF Analysis: iShares S&P 100

    Discover how the iShares S&P 100 offers an opportunity for investors to gain exposure to mega- and large-cap domestic company stocks.
  10. Stock Analysis

    3 Stocks You Wish You Had Bought in January

    Learn about three stocks investors wish they had bought in January of 2015 due to their performing better than the overall market.
RELATED FAQS
  1. What's the difference between old- and new-economy stocks?

    Old-economy stocks represent large, well-established companies that participate in more traditional industry sectors and ... Read Full Answer >>
  2. What are the drawbacks of a small investor buying blue-chip stocks?

    Blue-chip stocks are generally safer for investors. However, their drawbacks for small investors include moderate growth ... Read Full Answer >>
  3. Should I invest in penny stocks or large cap stocks for my retirement portfolio?

    Large-cap stocks are a superior investment option for retirement portfolios compared to penny stocks. Most penny stocks are ... Read Full Answer >>
  4. Is it more beneficial to invest in a blue chip stock or a penny stock?

    Penny and blue-chip are terms used to describe a stock's valuations and statures. Penny stocks are generally the stocks of ... Read Full Answer >>
  5. How can I calculate the forward p/e of the S&P 500?

    Forward price-to-earnings, or P/E, for the S&P 500 is calculated by dividing the market share per price by the forecasted ... Read Full Answer >>
  6. What is Apple's current mission statement and how does it differ from Steve Job's ...

    Apple's current mission statement is "Apple designs Macs, the best personal computers in the world, along with OS X, iLife, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Recession

    A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, ...
  2. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  3. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  4. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  5. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  6. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!