by Robert E. Litan

About the author: Robert E. Litan is vice president and director of the Economic Studies Program and Cabot Family Chair in Economics at the Brookings Institution, a public policy think tank in Washington, D.C.

The markets may have soured on Internet start-ups. High-tech oases in countries like Malaysia and India may not lift their countries out of poverty. But all those dot-coms and Silicon Valley dreams never had much to do with the real economic impact of the Internet. The new economy is alive and well.

The death of the dot-coms proves the Internet was overhyped. Don’t overreact. Sure, the dot-com stock bubble has burst, helping to cut the market value of stocks traded on the NASDAQ in half. It would be a mistake, however, to...