From the Editor Finance & Development, September 2016, Vol. 53, No. 3
A Tale of Two Tellers My mother eases her car into the drive-through lane at our local bank, signs the back of her check, and places it in a metal canister. WHOOSH—the cylinder flies through a pneumatic tube to the teller inside the building.
In a few minutes, the teller squawks her thanks from the intercom speaker nearby. Another WHOOSH, and the canister returns. Inside we find a deposit receipt and a lollipop. Welcome to high-efficiency consumer banking, circa 1973.
Summer 2016. In our kitchen, I watch my oldest son rip open his paycheck and whip out his iPhone. TAP. SWIPE. CLICK. The deposit is made in an instant, thanks to an app that plugs him into an electronic banking network.
Welcome to banking in the second machine age—the era of smart devices and network-connected machines. The difference between the two transactions speaks to the impressive efficiency gains made possible by advances in computing technology over the past four decades.
This issue of F&D focuses on how technology is driving growth. We look at the power of smart machines and artificial intelligence to transform economic life.
How can technology drive growth? In our lead article, Google Chief Economist Hal Varian looks at “transmission channels.” As with drive-through tellers, ever-more-powerful technology allows us to streamline, replacing less efficient practices (the drive-through teller) with more efficient ones (smartphone deposits).
Other articles in our cover package chronicle technology’s power to transform: Sanjiv Ranjan Das examines big data’s influence on economics and finance; Aditya Narain documents the rise of a new breed of hybrid financial technology—fintech—firms; and Sharmini...