nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2018‒06‒25
fourteen papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Monetary Reform, Central Banks and Digital Currencies By Sheila Dow
  2. Blockchains Unchained: Blockchain Technology and its Use in the Public Sector By Jamie Berryhill; Théo Bourgery; Angela Hanson
  3. The Role of Technology in Mortgage Lending By Fuster, Andreas; Plosser, Matthew; Schnabl, Philipp; Vickery, James
  4. Políticas de competencia para una economía digital: el marco regulatorio e institucional y el contexto internacional By Núñez Reyes, Georgina; De Furquim, Júlia; Pereira Dolabella, Marcelo
  5. The clearing of euro OTC derivatives post Brexit: Why a uniform regulation and supervision of CCPs is essential for European financial stability By Brühl, Volker
  6. Advertising as a Reminder : Evidence from the Dutch State Lottery By He, Chen; Klein, Tobias
  7. Percepția consumatorilor de internet asupra publicității online By Istrate, Flavia Andreea; Miroslav, Cristina Andreea; Olaru, Bianca Helene
  8. Private Remittances Received and Household Consumption in Ghana (1980-2016): An ARDL Analysis with Structural Breaks By Akpa, Emeka
  9. Transition digitale et reconfiguration des métiers dans les organisations : le rôle du Manager de Transition By Emmanuel Okamba
  10. Learning with a purpose: the balancing acts of machine learning and individuals in the digital society By Liberali, G.
  11. Analysing the distribution properties of Bitcoin returns By Afees A. Salisu; Aviral Kumar Tiwari; Ibrahim D. Raheem
  12. Stabiles Geld - eine Illusion? Alternative Währungssysteme - Hayeks Fundamentalkritik - Unabhängigkeit der Notenbanken By Issing, Otmar
  13. Cream Skimming and Information Design in Marching Markets By Romanyuk, Gleb; Smolin, Alexey
  14. The IT Revolution and Southern Europe's Two Lost Decades By Fabiano Schivardi; Tom Schmitz

  1. By: Sheila Dow (Department of Economics, University of Victoria)
    Abstract: The modern debate about monetary reform has taken on a new twist with the development of distributed ledger payments technology employing private digital currencies. In order to consider the appropriate state response, we go back to first principles of money and finance and the case for financial regulation: to ensure provision of a safe money asset and a stable supply of credit within an inherently unstable financial system. We consider calls to privatise money or to restrict money issue to the state against the background of the increasing marketisation of the financial sector and money itself. Following an analysis of private digital currencies, we then consider proposals for state issue of digital currency. It is concluded that the focus of attention should instead be on updating of regulation, not only to encompass digital currencies, but also to address other innovations in the financial sector which generate credit and liquidity, in order to meet the needs of the real economy. JEL Classification: E3, E5, G1
    Keywords: Digital Currencies, Central Banks, Financial Instability, Financial Regulation
    Date: 2018–06–22
  2. By: Jamie Berryhill; Théo Bourgery; Angela Hanson
    Abstract: Blockchain technology has evolved from a niche subject to the hottest tech disruption buzzword, but there is still a lot of confusion about the subject. Without a clear understanding about what Blockchains are, their potential public sector potential impact is sometimes misunderstood or, more often, ignored. Questions related to their technical complexity, risk, security, and appropriateness often serve as obstacles to government officials’ ability to truly engage with this emerging technology. In light of this, the Observatory of Public Sector Innovation (OPSI) in collaboration with the Working Party of Senior Digital Government Officials (E-Leaders) has developed a guide on Blockchains and how they may (and may not) apply to government. OPSI is part of the OECD Directorate for Public Governance (GOV).
    Date: 2018–06–19
  3. By: Fuster, Andreas; Plosser, Matthew; Schnabl, Philipp; Vickery, James
    Abstract: Technology-based (``FinTech'') lenders increased their market share of U.S. mortgage lending from 2% to 8% from 2010 to 2016. Using market-wide, loan-level data on U.S. mortgage applications and originations, we show that FinTech lenders process mortgage applications about 20% faster than other lenders, even when controlling for detailed loan, borrower, and geographic observables. Faster processing does not come at the cost of higher defaults. FinTech lenders adjust supply more elastically than other lenders in response to exogenous mortgage demand shocks, thereby alleviating capacity constraints associated with traditional mortgage lending. In areas with more FinTech lending, borrowers refinance more, especially when it is in their interest to do so. We find no evidence that FinTech lenders target marginal borrowers. Our results suggest that technological innovation has improved the efficiency of financial intermediation in the U.S. mortgage market.
    Keywords: Financial Intermediation; Fintech; Mortgages
    JEL: G21 G23 L51
    Date: 2018–05
  4. By: Núñez Reyes, Georgina; De Furquim, Júlia; Pereira Dolabella, Marcelo
    Abstract: En este documento se identifican distintas tendencias de la política de competencia en la economía digital, haciendo hincapié en la protección de datos y los procesos industriales. Se analiza el contexto de la política de competencia en la realidad económica de América Latina, marcada por un intenso proceso de digitalización. Este proceso conduce a un nuevo paradigma caracterizado por el uso de tecnologías más avanzadas, la globalización de los mercados y el estado de hiperconectividad de la economía. También se examinan las sinergias entre la competencia de los mercados y el desempeño de los gobiernos empresariales en un contexto de fusiones y nuevos modelos de negocio.
    Date: 2018–06–07
  5. By: Brühl, Volker
    Abstract: With a notional amount outstanding of more than USD 500 trillion, the market for OTC derivatives is of vital importance for global financial stability. A growing proportion of these contracts are cleared via central counterparties (CCPs), which means that CCPs are gaining in importance as critical financial market infrastructures. At the same time, there is growing concern that a new "too big to fail" problem could arise, as the CCP industry is highly concentrated due to economies of scale. From a European perspective, it should be noted that the clearing of euro-denominated OTC derivatives mainly takes place in London, hence outside the EU in the foreseeable future. For some time there has been a controversial discussion as to whether this can remain the case post Brexit. CCPs, which clear a significant proportion of euro OTC derivatives and are systemically relevant from an EU perspective, should be subject to direct supervision by EU authorities and should be established in the EU. This would represent an important building block for a future Capital Markets Union in Europe, as regulatory or supervisory arbitrage in favour of systemically important third-country CCPs could be prevented. In addition, if a systemically relevant CCP handling a considerable portion of the euro OTC derivatives business were to run into serious difficulties, this may impact ECB monetary policy. This applies both to demand for central bank money and to the transmission of monetary policy measures, which can be significantly impaired, particularly in the event that the repo market or payment systems are disrupted. It is therefore essential for the ECB to be closely involved in the supervision of CCPs. Against this background, the draft amendment of EMIR (European Market Infrastructure Regulation) presented on 13 June 2017 is a step in the right direction. In addition, there is an urgent need to introduce a recovery and resolution mechanism for CCPs in the EU to complement the existing single resolution mechanism (SRM) for banks in the eurozone. Only then can the diverse interdependencies between banks and CCPs be adequately taken into account in the recovery and resolution programmes required in a financial crisis.
    JEL: G20 G21
    Date: 2018
  6. By: He, Chen (Tilburg University, TILEC); Klein, Tobias (Tilburg University, TILEC)
    Abstract: We use high frequency data on TV and radio advertising together with data on online sales for lottery tickets to measure the short run effects of advertising. We find them to be strong and to last for up to about 4 hours. They are the bigger the less time there is until the draw. We develop the argument that this finding is consistent with the idea that advertisements remind consumers to buy a ticket and that consumers value this. Then, we point out that in terms of timing the interests of the firm and the consumers are aligned: consumers wish to be reminded in a way that makes them most likely to consider buying a lottery ticket. We present direct evidence that this does not only affect the timing of purchases, but leads to market expansion. Then, we develop a tractable dynamic structural model of consumer behavior, estimate the parameters of this model and simulate the effects of a number of counterfactual dynamic advertising strategies. We find that relative to the actual schedule it would be valued by the consumers and profitable for the firm to spread advertising less over time and move it to the last days before the draw.
    Date: 2018
  7. By: Istrate, Flavia Andreea; Miroslav, Cristina Andreea; Olaru, Bianca Helene
    Abstract: Internetul s-a bucurat de o adevarata transformare de-a lungul timpului, odata cu dezvoltarea tehnologiilor, devenind in prezent cel mai folosit mediu de comunicare. Spre deosebire de media de comunicare traditionala, internetul a devenit, totodata, un important mediu de publicitate, datorita versalitilitatii, interactivitatii si posibilitatii de targhetare a consumatorilor relevanti. Articolul de fata, prezinta perceptia consumatorilor asupra publicitatii online, avand o baza teoretica si una practica, reprezentata de o cercetare realizata pe un esantion alcatuit din 50 de respondenti, utilizatori de internet, ce vor arata care sunt tendintele mediului publicitar la momentul actual in Romania. Cuvinte cheie: publicitate online, comportamentul consumatorului online, internet, targhetare, publicitate personalizată, publicitate mobilă
    Keywords: publicitate online, comportamentul consumatorului online, internet, targhetare, publicitate personalizată, publicitate mobilă
    JEL: A19
    Date: 2018–05–10
  8. By: Akpa, Emeka
    Abstract: This study examined the short and long-run effects of private remittances on household consumption in Ghana from 1980 to 2016, controlling for structural breaks. Autoregressive Distributed Lag (ARDL) technique was used to investigate the relationship. Results showed that remittances positively impacted household consumption in Ghana in both the short and long-run howbeit, statistically insignificant. Hence, it was recommended, among other things that the government of Ghana collaborates with financial institutions to make remittance less expensive to encourage more remitting from the diaspora.
    Keywords: Remittances, Household Consumption, ARDL, Structural Breaks
    JEL: C32 F24
    Date: 2018–05–25
  9. By: Emmanuel Okamba (IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)
    Abstract: Abstract The digital transition reconfigures jobs and generates new jobs whose profiles have yet to be defined. It is based on a destructive innovation, linked to the mastery of the five digital jumps in which jobs with low empathy are automated and the most empathetic reconfigure to let emerge trades with a human face. The Transition Manager is one of the vectors of this innovation.
    Abstract: La transition digitale reconfigure les emplois et génère des nouveaux métiers dont les profils restent à définir. Elle repose sur une innovation destructrice, liée à la maîtrise des cinq sauts numériques dans laquelle, les emplois à faible empathie sont automatisés et les plus empathiques se reconfigurent pour laisser émerger les métiers à visage humain. Le Manager de Transition est l'un des vecteurs de cette innovation.
    Keywords: Digital Transition, Transition Manager, Robotization,Transition Digitale, Manager de Transition, Robotisation, Disruption,2
    Date: 2018–05–17
  10. By: Liberali, G.
    Keywords: e-commerce, informatiemaatschappij, adverteren, kunstmatige intelligentie, machine learning, multi-armed bandits, marketing science, online advertising, digital marketing, clinical trials
    JEL: C44 M31
    Date: 2018–05–25
  11. By: Afees A. Salisu (Centre for Econometric and Allied Research, University of Ibadan); Aviral Kumar Tiwari (2300 avenue des moulins, 3400 Montpellier, France Montpellier Business School, Montpellier, France.); Ibrahim D. Raheem (School of Economics, University of Kent, Canterbury, UK)
    Abstract: This study exploits several conditional heteroskedasticity models with various supported distributions in order to find the best distribution as well as the best GARCH-type model that may be used to model volatility of Bitcoin returns. Innovatively, the study is able to establish that pre-testing the residuals of Bitcoin returns for the best distribution can help to identify the appropriate distribution when modelling with GARCH-type models regardless of the data frequency.
    Keywords: Bitcoin returns; GARCH-type models; Error distributions
    Date: 2018–06
  12. By: Issing, Otmar
    Abstract: Der Beitrag analysiert die Voraussetzungen für stabiles Geld und setzt sich dabei grundlegend mit Hayeks Thesen zu alternativen Währungssystemen sowie dessen fundamentaler Kritik an der Möglichkeit zur Gestaltung der Geldpolitik auf wissenschaftlicher Basis auseinander. Er prüft Hayeks Vorschlag zur Entnationalisierung des Geldes und seine Thesen zur Überlegenheit des im privaten Wettbewerb geschaffenen Geldes. In diesem Zusammenhang schlägt der Beitrag einen Bogen zur aktuellen Diskussion über Kryptowährungen und wirft die Frage auf, ob virtuelle Währungen wie etwa Bitcoin geeignet sind, den Hayekschen Währungswettbewerb zu entfalten. Sodann wird im Gegensatz zu Hayeks Forderung nach einer Abschaffung der Zentralbanken deren entscheidende Rolle für anhaltendes Wachstum bei stabilen Preisen skizziert und die Wichtigkeit der Unabhängigkeit von Notenbanken für die dauerhafte Durchführung einer stabilitätsorientierten Geldpolitik hervorgehoben. Gleichwohl ergeht der Hinweis, dass Notenbanken mit der Überschreitung ihres Mandats auf lange Sicht gesehen selbst den Status ihrer Unabhängigkeit unterminieren können und damit die Rückübertragung der Kompetenz für zentrale geldpolitische Entscheidungen auf Regierung und Parlament provozieren. Die Gefahren der weitgehenden Unabhängigkeit einiger weniger an der Spitze der Notenbanken anerkennend wird anschließend die Bedeutung ihrer Rechenschaftspflicht und Transparenz ihrer Entscheidungen unterstrichen.
    Keywords: Geldpolitik,Hayek,Kryptowährungen,Unabhängigkeit,Währungswettbewerb,Zentralbanken
    Date: 2018
  13. By: Romanyuk, Gleb; Smolin, Alexey
    Abstract: Short-lived buyers arrive to a platform over time and randomly match with sellers. The sellers stay at the platform and sequentially decide whether to accept incoming requests. The platform designs what buyer information the sellers observe before deciding to form a match. We show full information disclosure leads to a market failure because of excessive rejections by the sellers. If sellers are homogeneous, then coarse information policies are able to restore efficiency. If sellers are heterogeneous, then simple censorship policies are often constrained efficient as shown by a novel method of calculus of variations.
    Keywords: cream skimming, matching markets, market failure, information design, calculus of variations
    JEL: C73 C78 D82 D83
    Date: 2018–05–14
  14. By: Fabiano Schivardi; Tom Schmitz
    Abstract: Since the middle of the 1990s, productivity growth in Southern Europe has been substantially lower than in other developed countries. In this paper, we argue that this divergence was partly caused by inefficient management practices, which limited Southern Europe's gains from the IT Revolution. To quantify this effect, we build a multi-country general equilibrium model with heterogeneous firms and workers. In our model, the IT Revolution generates divergence for three reasons. First, inefficient management limits Southern firms' productivity gains from IT adoption. Second, IT increases the aggregate importance of management, making its inefficiencies more salient. Third, IT-driven wage increases in other countries stimulate Southern high-skill emigration. We calibrate our model using firm-level evidence, and show that it can account for 28% of Italy's, 39% of Spain's and 67% of Portugal's productivity divergence with respect to Germany between 1995 to 2008. Keywords: TFP, Southern Europe, Divergence, IT Technology adoption, Management. JEL Codes: L23, O33
    Date: 2018

This nep-pay issue is ©2018 by Bernardo Bátiz-Lazo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.