Alexandros Ragoussis, Jonathan Timmis, 05 April 2022

Digital technologies have played a crucial role in helping firms weather the worst of the COVID shock. This column uses a dataset containing information on 150 million active websites around the world to measure the impact of COVID-19 on technology adoption. The authors find that the timing of lockdowns strongly predicts increased use of e-commerce and online payment technologies. The shock appears to have resulted more in a trend shift than a shift in levels, suggesting that COVID-19 may have transformed the trajectory of online market growth.  

Daron Acemoğlu, Thorsten Beck, Maurice Obstfeld, Yung Chul Park, 28 February 2022

As the world is (hopefully) emerging from the Covid-19 pandemic, major challenges await societies across the world related to climate change, inequality, digitalisation, and the undermining of democracy. A new book from CEPR and the Korea Institute of Finance discusses the institutional changes needed to address these challenges and the necessary reforms to make the global financial system more resilient.

Thorsten Beck, Stephen Cecchetti, Magdalena Grothe, Malcolm Kemp, Loriana Pelizzon, Antonio Sánchez Serrano, 19 January 2022

New technologies are changing how banks produce and provide financial services. These changes have implications for traditional banks, creating novel sources of systemic risk which could in turn pose regulatory and policy challenges. This column introduces a new report by the Advisory Scientific Committee of the European Systemic Risk Board that discusses the impact that digitalisation may have on the structure of the European banking system. Based on three scenarios for the future development of European banking, the authors derive an array of macroprudential policy recommendations.

Debora Revoltella, Julie Delanote, Tessa Bending, 03 December 2021

The European economic policy response to the COVID-19 pandemic has ensured business continuity and shielded investment, but digital and green transitions are now ever more urgent. This column uses data on 12,000 European firms from the European Investment Bank Investment Survey to show that the pandemic spurred many firms to start accelerating transformation efforts. Policy should seek to support this momentum amid post-pandemic economic recovery.

Peter Harasztosi, Laurent Maurin, Rozália Pál, Debora Revoltella, Wouter van der Wielen, 18 November 2021

Massive policy support sheltered many European firms from the unprecedented Covid shock. However, a debate has emerged regarding the potential side effects of continued support for long-term growth hampering the creative destruction process. This column uses data from the EIB Investment Survey to analyse the impact of policy support in detail. It shows that support went primarily to the most affected firms and does not find evidence of misallocation to zombie firms. In addition, policy support enhanced firms’ capacity to rebound from the crisis, enabling recapitalisation and promoting investment in digitalisation. 

Michael Bordo, 19 October 2021

Monetary transformations through history have been driven by changing technology, changing tastes, economic growth, and the demands to effectively satisfy the functions of money. This column argues that technological change in money and finance is inevitable, driven by the financial incentives of a market economy, and identifies four key lessons central banks could learn from history to enable them to provide digital currency to effectively fulfil their public mandates.

Debora Revoltella, Pedro J. F. de Lima, 21 December 2020

The Covid-19 pandemic poses severe risks for Europe’s economy, but it also presents opportunities. The sharp short-term shock will be followed by large structural changes to the global economy in the long term. This column sheds light on the challenges ahead using data from the European Investment Bank Investment Survey. Large sectors of Europe’s economy, particularly SMEs, need to innovate and adopt digital technologies to avoid falling behind. Policy support needs to evolve from liquidity provision to a more targeted push for structural transformation. 

Debora Revoltella, Désirée Rückert, Christoph Weiss, 18 March 2020

European firms lag behind the US in R&D investment and the adoption of digital technologies. Using firm-level data from 2019, this column finds that larger firms have higher rates of digital adoption than do their smaller peers, and that digital firms have better management practices and show more dynamism. European policymakers looking to close the innovation gap should address structural barriers to investment in digitalisation, remove disincentives to grow, and reduce market fragmentation, particularly in the service sector.

Laurence Boone, Debora Revoltella, 06 December 2019

For the past two years, global growth outcomes and prospects have steadily deteriorated, while investment growth has collapsed. This is particularly the case in Europe. This column argues that reducing policy uncertainty, rethinking fiscal policy, and acting vigorously to address the challenges raised by digitalisation, climate change, and persistent inequalities all have the potential to reverse the current slippery trend and lift investment and living standards. 

Vincent Labhard, Peter McAdam, Filippos Petroulakis, Lara Vivian, 27 August 2019

The fourth industrial revolution is bringing about numerous challenges and opportunities. This column summarises selected takeaways from a recent ECB conference which brought together leading minds from academia, institutions and the private sector on the expected effects of digitalisation on the economy, including labour markets, productivity, investment and inflation, and possible implications for monetary policy.

Molly Lesher, Jan Tscheke, 25 July 2019

E-commerce facilitates trade across borders, increases convenience for consumers, and enables firms to reach new markets. This column identifies a range of digital technologies and the new business models they enable that are driving dynamism in e-commerce markets. Despite this dynamism, however, important gaps remain with regard to e-commerce participation among firms and different groups of individuals. Targeted polices are needed to provide the regulatory flexibility for new business models to thrive and to ensure that e-commerce becomes more inclusive.

Markus K Brunnermeier, Harold James, Jean-Pierre Landau, 03 July 2019

Thanks to digitalisation, we now can hold money on our mobile phones and transfer wealth in real time to almost every corner of the world. Currencies can be swapped within milliseconds on smart phones and people can hold many currencies simultaneously in digital wallets. This column considers how digitalisation will affect the international monetary system, arguing that a new kind of currency area will emerge, held together by digital interconnectedness. These digital currency areas will cut across borders, increase currency competition and, in the process, may redefine the international monetary system.

Ramy El-Dardiry, Bastiaan Overvest, Michiel Bijlsma, 24 May 2019

Digitalisation is transforming human life – from the way we interact with each other to the way we work, relax, and create. R&D within companies is no exception. This column lays out pathways for policymakers to successfully adapt R&D policies to these changes based on three guiding principles: direct policies towards spillovers, make policies technology-neutral, and do not favour superstars over challengers.

Diane Coyle, 29 April 2019

Debora Revoltella, 22 January 2019

Europe is at risk of falling behind its global competitors. In a period of radical technological transformation, European firms are investing too little, with a gap both in tangible and intangible investment compared to the US. This column calls for a ‘retooling’ of Europe’s economy in relation to skills, innovation finance, the business environment, infrastructure, and deepening the Single Market.

Peter Bofinger, 12 June 2018

The digitalisation of money has the potential to change traditional structures of the financial system. This column discusses four areas in which it may have an impact, and argues that while digitalisation will not erode the importance of central banks, banks could be massively challenged by new forms of intermediation. 

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