The Macroeconomic Impact of Internet Finance

Abstract

This paper investigates the macroeconomic impacts of Internet finance, highlighting its advantages and challenges. Internet finance, a fusion of Internet technology with traditional financial practices, introduces innovative models for global asset management, capital financing, payments, investments, and intermediary services. While it enhances the accessibility and efficiency of financial services, it also introduces new risks, such as higher credit default rates. This study explores how Internet finance contributes to financial inclusivity and macroeconomic growth yet poses potential threats to traditional financial stability. The dual aspects of Internet finance are analyzed: its application in existing processes and its capacity to generate novel business models. Furthermore, the paper proposes strategic responses to mitigate the negative impacts of Internet finance, mainly focusing on risk management and regulatory improvements to safeguard economic stability.