Bank of Canada governor Stephen Poloz is recommending to his international policy-making peers that they consider the often-elusive economic effects created by the spread of digital disruption.
Poloz says statistical agencies have been underestimating the level of economic growth driven by the advance of digitization — an effect he believes could have implications for inflation outlooks and even interest-rate decisions.
He made the remarks Saturday during a panel appearance at the annual meeting of central bankers, academics and economists in Jackson Hole, Wyo.
Poloz says there are a couple of existing economic measures that provide a rough idea of the digital economy’s effects — but he believes they only represent the tip of the iceberg.
He says more information is still needed to understand the full impacts of digital disruptions on different industries — including the auto and financial services sectors.
For instance, he says the effects of digitization have led to upward revisions in recent years to earlier estimates for growth and investment, and he expects more positive adjustments could be on the way.
“The point is that our ability to measure the impact of digital technology is continually playing catch-up with the technology,” said Poloz’s prepared remarks for his panel appearance.
“The bottom line is that digital technologies are disrupting central banking along with everything else. Digital disruption is likely to be a major preoccupation of central bankers for the foreseeable future.”