Analysis of the effect of e-commerce increase on inflation

Abstract

The anti-pandemic restrictions of recent years fueled an explosive growth of e-commerce in goods and services in Russia and worldwide. Therefore, the issue of macroeconomic consequences of the process of e-commerce growth is relevant. The subject of this research is economic transformation under the influence of the spread of e-commerce. The study aims to identify key theoretical mechanisms of how development of e-commerce influences main economic indicators, including inflation. It is based on the methods of generalization, systematization, descriptive and graphical analysis. According to the results of the study, e-commerce most notably influences aggregate factor productivity, the cost of production factors, consumer welfare, international trade volume and the cost of information for consumers. The study concludes that e-commerce causes predominantly downward pressure on prices and inflation, regardless of the mechanism of influence, because of a decrease in production and transport costs, reduction in the corporate monopoly power, and better product variety. This conclusion is also confirmed by some empirical countrywide studies. The scientific novelty of the research lies in systematization of the channels via which e-commerce influences various spheres of the economy. The study recommends considering the factor of downward pressure while conducting Russian monetary policy in the condition of continued e-commerce spread. A promising area of further research is the empirical verification of identified theoretical mechanisms of influence based on the data on e-commerce development in Russian regions. 

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