Digitalisation and the economy

Luca Dedola, Michael Ehrmann, Peter Hoffmann, Ana Lamo, Gonzalo Paz-Pardo, Jiri Slacalek and Georg Strasser

No 2809, Working Paper Series from European Central Bank

Abstract: Digitalisation has fundamentally changed the global economy and will continue to do so. This paper draws on economic research to identify some of its key implications for labour markets, inequality, e-commerce and the financial system. Beyond its potential to boost productivity and living standards, digitalisation: i) does not necessarily replace jobs on aggregate but changes their content; ii) tends to raise income and wealth inequality; iii) has ambiguous effects on competition; and iv) might change how the retail and financial sectors respond to monetary policy. Developing adequate (re-)training opportunities and providing a labour market, regulatory, and innovation environment which encourages the creation of “good jobs” is essential to improve productivity and equity while avoiding a polarisation of labour markets. E-commerce and fintech will likely lead to a faster transmission of monetary policy. The rise of fintech brings about new risks for regulatory arbitrage and has ramifications for financial stability. JEL Classification: D31, D4, E52, G2

Keywords: competition; digitalisation; e-commerce; fintech; inequality (search for similar items in EconPapers)
Date: 2023-04
Note: 80922
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20232809

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