Jacques Bughin, Susan Lund, 09 January 2017

In around 25 years, the internet has become an integral part of our daily lives, connecting billions of users and businesses worldwide and leading to an explosion in the volume of cross-border digital flows. This column attempts to measure these flows and their impact on global activity in general. Global flows of goods, services, finance, people, and data have raised world GDP by at least 10% in the past decade, with the contribution to growth of GDP from data flows nearly matching the value of global trade in physical goods and services.

Christian Helmers, Pramila Krishnan, Manasa Patnam, 25 January 2016

The growth of e-commerce has seen an enormous increase in the choice of products available online. With recent evidence from psychology suggesting that too much choice can impede decision making, this column examines whether consumers’ online choices are consistent with models of limited attention. High-frequency, transaction-level data from an online retail store reveal that consumers are influenced by recommendations. This suggests consumers do indeed have limited attention and simplify decision making by focusing on a subset of available products.

Yuriy Gorodnichenko, Oleksandr Talavera, Slavik Sheremirov, 21 January 2015

An increasing share of purchases are made online where price changes are very cheap. This column presents new evidence on price dispersions and frictions using novel data from an online shopping platform from the US and the UK. Online prices are more flexible than prices in conventional stores but still sticky. Prices of goods sold online could be as imperfect as in regular markets. 

Andreas Lendle, Marcelo Olarreaga, Simon Schropp, Pierre-Louis Vézina, 04 September 2012

Geographic distance continues to encumber international trade despite advances in transportation and communication technologies. This column shows that eBay, an online market, reduces the effect of distance on trade by 65%, mainly by reducing information frictions. As consumers 'put their money where their mouse is', welfare gains are largest where they are most needed, i.e. in remote countries with bad institutions.

Chad Syverson, 25 July 2010

The internet is changing the way people do business. This column looks at how e-commerce has affected market structure among travel agencies, bookstores, and car dealerships. It suggests that low-cost firms will gain market share and may even become more profitable as e-commerce spreads, while higher-cost firms will be hurt, perhaps fatally.

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