Macroeconomic Stabilization in the Digital Age
Policy makers need to be aware of the increasing prominence of the digital economy and digital finance and seek to better understand how continued digitalization will affect policies aimed at managing the economy.
Macroeconomic Stabilization in the Digital Age provides insights into factors affecting the macroeconomic management of the economy in the digital age. Policy makers need to be aware of the increasing prominence of the digital economy and digital finance and seek to better understand how continued digitalization will affect policies aimed at managing the economy. For emerging market economies (EMEs), macroeconomic policy challenges have been exacerbated by the digital finance revolution in the aftermath of the global financial crisis and the coronavirus disease (COVID-19) pandemic, when many EMEs experienced large and volatile capital flows. Policy makers must also navigate through fluctuating trends in productivity and difficulties in estimating potential output in the era of digitalization.
The book is organized into three main parts: (1) digital finance and the macroeconomy, (2) capital flows and systemic risk in the digital age, and (3) macroeconomic uncertainty and new challenges for central banks. Part I is set against the context of the shift in financial intermediation away from traditional banks as large technology firms have increasingly provided financial services over the past decade. This part of the book focuses on the macroeconomic effects of digital finance and financial technology. Part II examines capital flow-related developments in the digital age, where the expansion in cross-border capital flow channels can create additional hurdles for EME authorities in managing capital flows. Finally, Part III relates the digital age to challenges faced by central banks and the implications of digitalization for the monetary policy transmission mechanism.
- 1. Introduction by John Beirne and David G. Fernandez
- Part I: Digital Finance and the Macroeconomy
- 2. Macroeconomic Challenges and the Resilience of Emerging Market Economies in the 21st Century by Joshua Aizenman
- 3. The Macroeconomics of De-Cashing by Alexei Kireyev
- 4. Digital Transformation: Some Implications for Financial and Macroeconomic Stability by Hans Genberg
- 5. Fintech Development in the People’s Republic of China and its Macroeconomic Implications by Yiping Huang
- 6. A Multivariate Bayesian Vector Autoregression Analysis of Digital Payment Systems and Economic Growth in India by Debasis Rooj and Reshmi Sengupta
- Part II: Capital Flows and Systemic Risk in the Digital Age
- 7. The Impact of Banking Integration on East Asian Commercial Banks by Dung Thi Thuy Ngugen, Ivan Diaz-Rainey, and Helen Roberts
- 8. Does Fintech Contribute to Systemic Risk? Evidence from the United States and Europe by Lavinia Franco, Ana Laura Garcia, Vigor Husetovic, and Jessica Lassiter
- 9. The Nexus of Safe Asset Shortage, Credit Growth, and Financial Instability by Sujin Kim
- 10. Rationales for the Use of Capital Flow Management Measures since the Global Financial Crisis by Mitali Das and Evgenia Pugacheva
- Part III: Macroeconomic Uncertainty and New Challenges for Central Banks
- 11. Assessing Macroeconomic Uncertainties for an Emerging Economy by Motilal Bicchal and S. Raja Sethu Durai
- 12. Do Fintech Activities Affect Monetary Policy? by Muhammad Zubair Mumtaz, Zachary A. Smith, and Zafar Mahmood
- 13. Foreign-Currency Exposures and the Financial Channel of Exchange Rates: Eroding Monetary Policy Autonomy in the Asia and Pacific Region? by Georgios Georgiadis and Feng Zhu