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Friday, September 17, 1999 Published at 15:15 GMT 16:15 UK

Business: The Economy

Greenspan says US is Y2K ready

Greenspan says the US is prepared for the millenium bug

The millennium bug is unlikely to disrupt the US economy, Federal Reserve chairman Alan Greenspan said.

Bugtown UK
Mr Greenspan, speaking before the President's Council on Year 2000 conversion in New York, said that the US economy is well prepared for the date change and that risks of any "systemic breakdown" from the millennium bug are "negligible".

"If we avoid fear-induced significant economic changes, the century date change will hopefully replicate the saga of the dog that did not bark," he said.

The chairman sounded one note of caution when he said companies should communicate their level of readiness to consumers and businesses, so they know what preparations to make.

"Accurate, credible, and timely information on the general state of readiness will be essential to reducing uncertainties in the months ahead," he said, adding that consumer fears had waned.

Fear had existed that companies might build inventories in case of disruptions. This increase in production could create inflationary pressures in the US economy.

Mr Greenspan added that evidence of this is mixed so far. "If only a small percentage of companies choose to add to investories, the effect ( on the economy) will be insignificant," he said.

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