April 2022

Post n°267

Consumption inequality in the digital age

Published on 04/28/2022

Share links

By Kai Arvai and Katja Mann

Rich households consume digital goods more intensively than poor households. As digitalisation makes some goods and services cheaper, higher-income households benefit more. Using US household data, this blog argues that the relative price effect of digitalisation is sizeable and amplifies the effects that digitalisation has on income inequality.

Chart 1: ICT intensity of consumption basket along the income distribution in the US
Chart 1: ICT intensity of consumption basket along the income distribution in the US Source: Arvai and Mann (2021) Note: The graph shows the share of information and communication technology (ICT) in the consumption basket by income percentile for different sub-periods.
Updated on 04/28/2022 09:14
Post n°266

AI and banks’ own funds: a new determination?

Published on 04/20/2022

Share links

By Hyacinthe Buisson, Henri Fraisse and Matthias Laporte

The increasing use of artificial intelligence (AI) or machine learning (ML) techniques could allow banks to develop new credit risk models. These techniques could lead to substantial reductions in capital requirements. However, the opaque nature of these algorithms and the governance challenges they raise might make their adoption less attractive.

Chart 1: Neural network models could lead to substantial reductions in capital requirements
Chart 1: Neural network models could lead to substantial reductions in capital requirements Source: Fraisse and Laporte (2022) forthcoming in the Journal of Banking and Finance.
Updated on 04/20/2022 10:02
Post n°265

Climate change and implications for the conduct of monetary policy

Published on 04/01/2022

Share links

By Stéphane Dees, Jean-François Ouvrard and Pierre-François Weber

Macroeconomic and financial market disruptions linked to climate change and transition policies could affect the conduct of monetary policy. Climate risks could impair the monetary policy transmission channel, limit the monetary policy space for conventional tools and complicate the assessment of the monetary policy stance.

Chart 1: Inflation-output growth trade-off under a disorderly transition scenario
Chart 1: Inflation-output growth trade-off under a disorderly transition scenario Source: European Central Bank (ECB) calculations
Updated on 04/01/2022 16:48