FROM THE EDITOR.

Economic productivity is measurable, and economists have been quantifying it for decades. Now it appears that after a sprint upward in the late 1990s, U.S. productivity is falling back to more historic levels. Why is that, and is it a danger signal for companies and for the larger economy?

Writer Gregory Millman posed these and other questions to several prominent economic thinkers. While they're not entirely sure what the long-term trends suggest, and disagree somewhat about the import of the late-1990s' spike, they agree that productivity will continue to have a big impact on U.S. companies' competitiveness and on the stock market. Their thoughts make for stimulating reading.

On a very topical subject, three accounting professors from the University of North Carolina/Wilmington have combined on a cogent analysis of the FASB's latest statements on business combinations and accounting for goodwill and intangible assets. They offer a few predictions about the short-term impact of the new rules -- one of them being a good deal of confusion.

Following last month's interview with outgoing Nasdaq Chairman Frank Zarb, we've turned to the New York Stock Exchange for an assessment of the global equity arena and the NYSE's competitive positioning. Catherine Kinney, a member of the Big Board's Office of the Chief Executive, sat with Managing Editor Ellen M. Heffes and explained the thinking behind the NYSE's strategic initiatives.

Two articles focus on private equity. Rick Rickersten of Thayer Capital talks about management buyouts; Rickersten believes that well-informed CFOs can become powerful leaders in the process. A second article looks at NumeriX, a derivatives software modeling firm that has recently received a big infusion from a former Microsoft executive.

Following up on one of the most stimulating presentations from last spring's Financial Executives Summit, FE interviewed futurist Ian Morrison. Morrison, who popularized the term "the second curve," talks about how companies need to constantly reinvent themselves -- and names a few he thinks have successfully done just that.

While outsourcing firms are encountering stiff headwinds in this economy, the overall trend for business process outsourcing is way up in recent years. And why not? Companies realize that it can be good for their resource levels and their bottom lines to shift non-core activities to specialists who can negotiate better terms and bring best practices to the job. Speaking of best practices, Hackett Research, which has carved out a niche in benchmarking corporate functions, examines the subject of procurement and concludes that it's best done with an "e" in front -- i.e., electronically. Hackett says e-procurement saves money and allows managers to do value-adding work in its place.

Finally, this month's Financial Reporting column features an interview with FASB Chairman Edmund Jenkins. Ellen Heffes asked him to assess the state of the board's project list since he took over, and discuss the outlook for international accounting standards. Jenkins sounds a note of optimism that international standards-setters are operating independently and objectively and creating a sound framework for weighing change.

Jeffrey Marshall