The Greek elections have brought the eurozone crisis to the surface again. These days, politicians fight once more about how to deal with financial instability in Europe. Depending to what side they stand on, economists either demand that traditional principles of monetary policy need to be adhered to or claim that these principles are of no value during an extraordinary crisis.
Unfortunately, both camps ignore the radical shift that has happened over the last decades. They do not consider how the digital revolution has transformed the financial system. If we ignore the impact of information technology on banking, however, we cannot deal properly with the challenges our financial system faces today.
Our article in the “Ökonomenstimme,” which is an economics blog written in German, takes up these issues.