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Digitalisation and the economy

Author

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

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

Suggested Citation

  • Dedola, Luca & Ehrmann, Michael & Hoffmann, Peter & Lamo, Ana & Paz-Pardo, Gonzalo & Slacalek, Jiri & Strasser, Georg, 2023. "Digitalisation and the economy," Working Paper Series 2809, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20232809
    Note: 80922
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    competition; digitalisation; e-commerce; fintech; inequality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G2 - Financial Economics - - Financial Institutions and Services

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