Is Digitalization Driving Domestic Inflation

This paper examines the extent to which digitalization—measured by a new proxy based on IP addresses allocations per country—has influenced inflation dynamics in a sample of 36 advanced and emerging economies over 2000-2017. Phillips curve estimates show that digitalization has a statistically significant negative effect on inflation in the short run. Its economic impact is not large but has increased since 2012 and mainly operates through a cost/competition channel. Principal components and cointegration analysis further suggest digitalization is a key driver of lower trend inflation.

This paper examines the extent to which digitalization—measured by a new proxy based on IP addresses allocations per country—has influenced inflation dynamics in a sample of 36 advanced and emerging economies over 2000-2017. Phillips curve estimates show that digitalization has a statistically significant negative effect on inflation in the short run. Its economic impact is not large but has increased since 2012 and mainly operates through a cost/competition channel. Principal components and cointegration analysis further suggest digitalization is a key driver of lower trend inflation.

China’s digital economy has expanded rapidly in recent years. While average digitalization of the economy remains lower than in advanced economies, digitalization is already high in certain regions and sectors, in particular e-commerce and fintech, and costal regions. Such transformation has boosted productivity growth, with varying impact on employment across sectors. Going forward, digitalization will continue to reshape the Chinese economy by improving efficiency, softening though not reversing, the downward trend of potential growth as the economy matures. The government should play a vital role in maximizing the benefits of digitalization while minimizing related risks, such as potential labor disruption, privacy infringement, emerging oligopolies, and financial risks.

As humans charge up the steep slope of technological innovation, digital age media increasingly shapes our perception of everything--even spiritual matters. The next stage of spiritual development may be the product of a digital interface between our own image of the divine, virtual reality technology that produces real perceptions, and with devices that stimulate areas of the brain associated with spiritual experience. This book explores the influence of digital media on spirituality and the impact of the digital environment on our experience of the spiritual world. The author predicts a future in which digital technology and neuroscience will combine to create a new understanding of the divine. Instructors considering this book for use in a course may request an examination copy here.

The outlook for the global economy has darkened. Global financing conditions have tightened, industrial production has moderated, trade tensions have intensified, and some large emerging market and developing economies have experienced significant financial market stress. Faced with these headwinds, the recovery in emerging market and developing economies has lost momentum. Downside risks have become more acute and include the possibility of disorderly financial market movements and an escalation of trade disputes. Debt vulnerabilities in emerging market and developing economies, particularly low-income countries, have increased. More frequent severe weather events would raise the possibility of large swings in international food prices, which could deepen poverty. In this difficult environment, it is of paramount importance for emerging market and developing economies to rebuild policy buffers while laying a stronger foundation for future growth by boosting human capital, promoting trade integration, and addressing the challenges associated with informality,

"Digitalization encompasses a wide range of new applications of information technology in business models and products that are transforming the economy and social interactions. Digitalization is both an enabler and a disruptor of businesses. The lack of a generally agreed definition of the “digital economy” or “digital sector” and the lack of industry and product classification for Internet platforms and associated services are hurdles to measuring the digital economy. This paper distinguishes between the “digital sector” and the increasingly digitalized modern economy, often called the “digital economy,” and focuses on the measurement of the digital sector. The digital sector covers the core activities of digitalization, ICT goods and services, online platforms, and platform-enabled activities such as the sharing economy."

As well as evaluating the role of regulation in regulating innovative technologies, this book: identifies ways in which technology can facilitate innovation in the post-COVID era; illustrates how key actors, such as central banks, can facilitate the transition process to a net-zero based carbon emissions phase; illustrates how innovative techniques and technology can interact with concepts such as green finance to facilitate a smooth transition to a net-zero carbon emissions economy; and highlights challenges which may be encountered during the transition process, and how to address such risks. The topics covered in this volume also include the role of sensor technologies, as well as those technologies which can facilitate a smooth gradual transition to a net-zero carbon emissions economy; digital payments in the post-COVID era (embracing wholesale and retail CBDCs, as well as other technological platforms); the role of central banks, technological innovation, and tech firms in addressing transition risks and enhancing sustainable growth; the feasibility of achieving a net zero based carbon emissions economy; as well as the role of renewable energy in the path towards a sustainable future.