ECB Conference on Digitalization, 2019 - Anton Korinek
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Korinek, Anton
Anton Korinek of the University of Virginia speaks on his topic of discussion at the ECB's Conference on Digitalization.
 My paper today is about the growing role of digital technologies and information goods across our economy. And what we find is that digitization is really a game changer. You see, digital goods, information goods differ from traditional goods in that once you have produced them, you can reproduce them and copy them and distribute them to a wide market at almost zero cost. And that implies that digitization creates increasing returns and a role for natural monopolies. And if you look at the effects of that across our economy, what you can see is that we have increasing monopolization or oligopolization of the economy, a rise of superstars and increasing importance of rents in the economy, growing inequality, but you also have effects on monetary policy. So what digitization does is it flattens the Phillips curve and that makes it more difficult for central banks to affect the real economy through their policy actions.
 My paper today is about the growing role of digital technologies and information goods across our economy.  And what we find is that digitization is really a game changer.  You see, digital goods, information goods differ from traditional goods in that once you have produced them,  you can reproduce them and copy them and distribute them to a wide market at almost zero cost.  And that implies that digitization creates increasing returns and a role for natural monopolies.  And if you look at the effects of that across our economy, what you can see is that we have increasing monopolization  or oligopolization of the economy, a rise of superstars and increasing importance of rents in the economy,  growing inequality, but you also have effects on monetary policy.  So what digitization does is it flattens the Phillips curve and that makes it more difficult for central banks  to affect the real economy through their policy actions.
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