Granularity and Digitalization: Challenges for Monetary Policy - Granularity and Digitalization: Challenges for Monetary Policy - Central Bank of Chile
The Series of Economic Policy Papers of the Central Bank of Chile presents views and analyses of the Chilean economy and the conduct of monetary policy prepared by Bank authorities. This series, aimed at the general public, disseminates and discusses topics that are relevant to the goals and operations of the Central Bank.
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Using a representative agent in the monetary policy framework and in the evaluation of economic conditions and forecasting of the variables of interest has been very useful for central banking professionals. However, the digitization of activities has made it more difficult to measure economic relations and it is likely that the mechanisms of monetary policy transmission have also changed. Central banks must be aware of the difficulties that these trends pose for achieving their objectives. In this document we present the main challenges for statistical, research and model development, emphasizing the importance of information granularity, particularly on prices, labor and financial markets, and the need to share data among government agencies.