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This paper investigates the role of digitialization in improving economic resilience. Using balance sheet data from 24,000 firms in 75 countries, and a difference-in-differences approach, we find that firms in industries that are more digitalized experience lower revenue losses following recessions. Early data since the outbreak of the COVID-19 pandemic suggest an even larger effect during the resulting recessions. These results are robust across a wide range of digitalization measures—such as ICT input and employment shares, robot usage, online sales, intangible assets and digital skills listed on online profiles—and several alternative specifications.

Macroeconomics --- Economics: General --- Industries: Information Technololgy --- Diseases: Contagious --- Investment --- Capital --- Intangible Capital --- Capacity --- Business Fluctuations --- Cycles --- Technological Change: Choices and Consequences --- Diffusion Processes --- Health Behavior --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Information technology industries --- Economic growth --- Infectious & contagious diseases --- Technology --- general issues --- Digitalization --- Economic recession --- COVID-19 --- Health --- Currency crises --- Informal sector --- Economics --- Information technology --- Recessions --- Communicable diseases

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Recent failures of US banks highlight that large liability withdrawals can damage capital positions—i.e., that liquidity risk and solvency risk interact. A simple risk assessment for banks in a wide group of countries finds sizable exposure to this interaction. This varies significantly across banks—primarily reflecting differences in cash buffers, capitalization, securities holdings and exposure to market risk—and is highly concentrated. Vulnerability is generally greater for banks in AEs due to lower cash buffers, securities holdings and capitalization. Within AEs—unlike in EMs—larger banks are most exposed, due to greater wholesale funding and thinner capital buffers. Estimated aggregate losses are substantial in some countries, reflecting a range of recent shocks.

Banks and Banking --- Banks --- Bonds --- Budget Systems --- Capital and Ownership Structure --- Currency crises --- Debt Management --- Debt --- Debts, Public --- Depository Institutions --- Economic & financial crises & disasters --- Economics of specific sectors --- Economics --- Economics: General --- Finance, Public --- Financial institutions --- Financial instruments --- Financial Markets and the Macroeconomy --- Financial regulation and supervision --- Financial Risk and Risk Management --- Financial risk management --- Financial services law & regulation --- Financing Policy --- General Financial Markets: General (includes Measurement and Data) --- Goodwill --- Informal sector --- Investment & securities --- Investments: Bonds --- Investments: General --- Macroeconomics --- Market risk --- Micro Finance Institutions --- Mortgages --- National Budget --- Public debt --- Public finance & taxation --- Public Finance --- Securities --- Sovereign bonds --- Sovereign Debt --- Value of Firms

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We estimate the impact of distinct types of slowdowns in China on countries and firms globally. First, we combine a structural vector autoregression framework with a broad-based measure of domestic economic activity in China to distinguish supply versus demand components of Chinese growth. We then use local projection models to assess the responses to such shocks of GDP growth (revenue) in other countries (firms). We find that: (i) both supply and demand slowdowns are associated with substantial declines in partner GDP and firm revenue; (ii) negative spillovers are larger in countries and firms with stronger trade links with China; and (iii) spillovers from Chinese supply shocks are stronger than spillovers from demand shocks, both at the aggregate- and firm-level.

Agriculture: Aggregate Supply and Demand Analysis --- Consumption --- Currency crises --- Diffusion Processes --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Econometric analysis --- Econometrics & economic statistics --- Econometrics --- Economic & financial crises & disasters --- Economic theory & philosophy --- Economic Theory --- Economic theory --- Economics of specific sectors --- Economics --- Economics: General --- Empirical Studies of Trade --- Exports and Imports --- Exports --- Externalities --- Financial sector policy and analysis --- Informal sector --- International Business Cycles --- International economics --- International finance --- International trade --- Macroeconomics --- Macroeconomics: Consumption --- National accounts --- Prices --- Saving --- Spillovers --- State Space Models --- Structural vector autoregression --- Supply and demand --- Supply shocks --- Time-Series Models --- Trade and Labor Market Interactions --- Trade: General --- Wealth

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To explore risks associated with digital money, this Fintech Note simulates the hypothetical large-scale adoption of crypto assets in a model of a small open economy. The model highlights that a foreign-currency denominated stablecoin can amplify currency substitution and capital outflows in response to negative shocks. Monetary policy transmission is also weakened, forcing the central bank to adjust interest rates more aggressively in response to shocks. Capital flow management measures—if they do not constrain crypto flows—further incentivize households to hold foreign stablecoins for circumvention purposes, exacerbating the negative effects of crypto adoption on the macroeconomy. This underscores that widespread crypto adoption can weaken policymakers’ available options for mitigating external shocks and potentially increase cross-country spillovers.

Central Bank digital currencies --- Central Banks and Their Policies --- Currencies --- Currency crises --- Distributed ledgers --- Dollarization --- Economic & financial crises & disasters --- Economic History: Transport, International and Domestic Trade, Energy, Technology, and Other Services: General, International, or Comparative --- Economic sectors --- Economics of specific sectors --- Economics --- Economics: General --- Exports and Imports --- Financial crises --- Financial services industry --- Financial technology (fintech) --- Foreign Exchange --- Government and the Monetary System --- Industries: Financial Services --- Informal Economy --- Informal sector --- International economics --- International Investment --- Investments, Foreign --- Long-term Capital Movements --- Macroeconomics --- Monetary economics --- Monetary policy --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Monetary Systems --- Money and Monetary Policy --- Money --- Payment Systems --- Regimes --- Standards --- Technological innovations --- Technology --- Underground Econom