ECB Conference on Digitalization, 2019 - Janice Eberly
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Eberly, Janice
Janice Eberly of Northwestern University speaks on her topic of discussion at the ECB's Conference of Digitalization.
 So at the conference on digital developments and disruption, I focused on the effects on the macro economy of digital innovation. And there's a number of puzzles in macroeconomics, as there always are, and we're hoping that these digital developments will help us understand some of those puzzles. So one that I've focused on is a decline in investment over time. And what's especially surprising about that decline in investment is that it's been concentrated in firms that you think should be the most dynamic and growth oriented of all of the firms. So those in high tech and some of those in healthcare, which we think are pretty dynamic sectors in the economy. But in those sectors, you don't see growth in physical capital. Instead, you see growth in intangible capital. So things like patents and innovative technologies and new software and other innovations. And so that trade-off has really changed the structure of these firms in ways that we think has implications for the macroeconomy. So we see a different kind of growth going forward in this intangible capital rather than in the traditional kinds of equipment and buildings, for example, that we understood historically.
 So at the conference on digital developments and disruption, I focused on the effects on the macro economy of digital innovation.  And there's a number of puzzles in macroeconomics, as there always are, and we're hoping that these digital developments will help us understand some of those puzzles.  So one that I've focused on is a decline in investment over time.  And what's especially surprising about that decline in investment is that it's been concentrated in firms that you think should be the most dynamic and growth oriented of all of the firms.  So those in high tech and some of those in healthcare, which we think are pretty dynamic sectors in the economy.  But in those sectors, you don't see growth in physical capital. Instead, you see growth in intangible capital.  So things like patents and innovative technologies and new software and other innovations.  And so that trade-off has really changed the structure of these firms in ways that we think has implications for the macroeconomy.  So we see a different kind of growth going forward in this intangible capital rather than in the traditional kinds of equipment and buildings, for example, that we understood historically.
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