nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2019‒04‒08
thirty-one papers chosen by

  1. Cash Use Across Countries and the Demand for Central Bank Digital Currency By Tanai Khiaonarong; David Humphrey
  2. The Effect of Cryptocurrency on Exchange Rate of China: Case Study of Bitcoin By Riska Dwi, Astuti; Nadia, Fazira
  3. Regulation of Cryptocurrencies: Evidence from Asia and the Pacific By Jose Antonio Pedrosa-Garcia; Yasmin Winther De Araujo Consolino Almeida
  4. Analysis of the possibilities of using the distributed registry technology to improve the functioning of the sectors of the Russian economy By Zubarev, Andrey (Зубарев, Андрей); Shilov, Kirill (Шилов, Кирилл); Suleimanova, Mariana (Сулейманова, Мариана); Golovanova, Elizaveta (Голованова, Елизавета); Grebenkina, Alina (Гребёнкина, Алина)
  5. Artificial Intelligence: A European Perspective By Alessandro Annoni; Peter Benczur; Paolo Bertoldi; Blagoj Delipetrev; Giuditta De Prato; Claudio Feijoo; Enrique Fernandez Macias; Emilia Gomez Gutierrez; Maria Iglesias Portela; Henrik Junklewitz; Montserrat Lopez Cobo; Bertin Martens; Susana Figueiredo do Nascimento; Stefano Nativi; Alexandre Polvora; Jose Ignacio Sanchez Martin; Songul Tolan; Ilkka Tuomi; Lucia Vesnic Alujevic
  6. Two-Sided Market, R&D and Payments System Evolution By Bin Grace Li; James McAndrews; Zhu Wang
  7. Analysis of investment opportunities for the purpose of creating value in the financial technology sector using the example of cryptocurrency By Gusev, Andrey (Гусев, Андрей)
  8. Does Consumer Microfinance Expand Financial Inclusion in the UK? By Gisela Mann
  9. International experience in the regulation of the sphere of intercorporate electronic document management By Morosanova, Anastasia (Моросанова, Анастасия); Morozov, Anton (Морозов, Антон); Shpakova, Anastasia (Шпакова, Анастасия)
  10. Analyzing the Transformation of Work and Its Effects on Productivity in the Age of Automatization? By Kuusi, Tero; Kulvik, Martti; Laiho, Maarit; Ropponen, Annina; Vähämäki, Maija
  11. Bits and bolts: The digital transformation and manufacturing By Matej Bajgar; Sara Calligaris; Flavio Calvino; Chiara Criscuolo; Jonathan Timmis
  12. Good practice guide on online advertising: Protecting consumers in e-commerce By OECD
  13. The Mobile Phone, Information Sharing and Financial Sector Development in Africa: A Quantile Regressions Approach By Simplice A. Asongu; Nicholas M. Odhiambo
  14. Sharing the liberal utopia. The case of Uber in France and the US By Katarzyna Gruszka; Andreas Novy
  15. Academic offer and demand for advanced profiles in the EU. Artificial Intelligence, High Performance Computing and Cybersecurity By Montserrat Lopez-Cobo; Giuditta De Prato; Georgios Alaveras; Riccardo Righi; Sofia Samoili; Jiri Hradec; Lukasz Ziemba; Katarzyna Pogorzelska; Melisande Cardona
  16. GDP-B: Accounting for the Value of New and Free Goods in the Digital Economy By Erik Brynjolfsson; Avinash Collis; W. Erwin Diewert; Felix Eggers; Kevin J. Fox
  17. Debasements and Small Coins: An Untold Story of Commodity Money By Jin, Gu; Zhu, Tao
  18. Technological Change and Financial Innovation in Banking: Some Implications for FinTech By W. Scott Frame; Larry Wall; Lawrence J. White
  19. Malaysia's Digital Economy By World Bank Group
  20. The race against the robots and the fallacy of the giant cheesecake: Immediate and imagined impacts of artificial intelligence By Naude, Wim
  21. Blockchain Revolution without the Blockchain By Hanna Halaburda
  22. Big Data in Finance and the Growth of Large Firms By Juliane Begenau; Maryam Farboodi; Laura Veldkamp
  23. Mums Go Online: Is the Internet Changing the Demand for Healthcare? By Amaral Garcia, Sofia; Nardotto, Mattia; Propper, Carol; Valletti, Tommaso
  24. Methodological guide for implementation and evaluation of open e-textbook programs By Alek Tarkowski; Michal Sitek; Jan Strycharz; Riina Vuorikari; Jonatan Castano Munoz
  25. How to make crowdfunding work in Europe By Dmitry Chervyakov; Jörg Rocholl
  27. Risk Aversion and Bitcoin Returns in Normal, Bull, and Bear Markets By Elie Bouri; Rangan Gupta; Chi Keung Marco Lau; David Roubaud
  28. Comprehensive analysis of the development of the global financial technology market (fintech) By Trunin, Pavel (Трунин, Павел); Kiyutsevskaya, Anna (Киюцевская, Анна); Narkevich, Sergey (Наркевич, Сергей); Inozemtsev, Eduard (Иноземцев, Эдуард); Hudko, Elizaveta (Худько, Елизавета)
  29. Deep Learning in Asset Pricing By Luyang Chen; Markus Pelger; Jason Zhu
  30. Momentum and liquidity in cryptocurrencies By Stjepan Begu\v{s}i\'c; Zvonko Kostanj\v{c}ar
  31. The Credit Rating Agencies and Their Role in the Financial System By Lawrence J. White

  1. By: Tanai Khiaonarong; David Humphrey
    Abstract: The level and trend in cash use in a country will influence the demand for central bank digital currency (CBDC). While access to digital currency will be more convenient than traveling to an ATM, it only makes CBDC like a bank debit card—not better. Demand for digital currency will thus be weak in countries where cash use is already very low, due to a preference for cash substitutes (cards, electronic money, mobile phone payments). Where cash use is very high, demand should be stronger, due to a lack of cash substitutes. As the demand for CBDC is tied to the current level of cash use, we estimate the level and trend in cash use for 11 countries using four different measures. A tentative forecast of cash use is also made. After showing that declining cash use is largely associated with demographic change, we tie the level of cash use to the likely demand for CBDC in different countries. In this process, we suggest that one measure of cash use is more useful than the others. If cash is important for monetary policy, payment instrument competition, or as an alternative payment instrument in the event of operational problems with privately supplied payment methods, the introduction of CBDC may best be introduced before cash substitutes become so ubiquitous that the viability of CBDC could be in doubt.
    Keywords: Bank credit;Central banks;Central bank policy;Central bank accounting;Bank accounting;digital cash;e-money;physical cash;non-cash;giro
    Date: 2019–03–01
  2. By: Riska Dwi, Astuti; Nadia, Fazira
    Abstract: In recent years, there have been many significant changes in commercial transactions. Not only e-commerce continues to grow, but also the form of payment services and service providers are consistently growing, such as virtual currency. One of virtual currency that quite popular is cryptocurrency especially Bitcoin. China became the country with the largest Bitcoin market in the world in the past few years. However, due to the concerns about money laundering and threats to China's financial stability and affecting the domestic currency, the Chinese government has formed a strict policy on Bitcoin. Therefore, nowadays, China is no longer the largest Bitcoin market in the world. Regarding the recently implemented policy, this study aims to analyze whether Bitcoin does affect China's exchange rate. The main independent variables in this research are specified to Bitcoin price volatility from BTCE, and controlled with the variable of the current account, inflation, and money supply. Monthly time series data from November 2012 until July 2017 is analyzed using autoregressive distributed lag (ARDL). The estimation results show that Bitcoin price volatility significantly affects the exchange rate in the long run. The higher of Bitcoin price volatility implies higher risk. The negative sign in the coefficient suggests that when Bitcoin's price volatility increases, investors tend to switch their investments on real currency will be preferable so that the exchange rate will be appreciated.
    Keywords: Cryptocurrency, Bitcoin, Exchange Rate, ARDL, China
    JEL: E52 G15 G18
    Date: 2018–09–12
  3. By: Jose Antonio Pedrosa-Garcia (United Nations ESCAP); Yasmin Winther De Araujo Consolino Almeida (Macroeconomic Policy and Financing for Development Division, ESCAP)
    Abstract: This paper reviews the key features of cryptocurrencies and their underlying technology, blockchain. It becomes clear that cryptocurrencies do not fulfill the three functions of money, at least for the moment, but should instead be understood as high-risk, high-profitability securities. While there are great opportunities such as increased remittances, their potential disruption of economic activity, and particularly of monetary policy is mind-blowing. Under this premise, and keeping in mind hackers’ heists suffered by cryptocurrency exchanges, it is important to regulate cryptocurrencies. Four core questions countries should decide on are: whether they consider cryptocurrencies’ legal tender, whether they allow cryptocurrency exchanges to operate (and if so, how); whether Initial Coin Offerings (ICOs) should be allowed (and if so, how); and whether they allow mining. Several policy options are presented, both from a theoretical perspective, and as they have been implemented by countries in Asia-Pacific. While countries such as China have decided to be restrictive, others such as Japan have chosen to regulate to let the sector thrive. Such diversity may be understandable, given that is such a novel technology that still poorly understood – especially its evolution. This diversity of standards offers great room for regulatory arbitrage, and highlights a great need for global coordination on cryptocurrency regulation and supervision.
    Keywords: Cryptocurrencies, Blockchain, Bitcoin, Regulation
    JEL: E51 G11 G18 G28 O16
    Date: 2018–08
  4. By: Zubarev, Andrey (Зубарев, Андрей) (The Russian Presidential Academy of National Economy and Public Administration); Shilov, Kirill (Шилов, Кирилл) (The Russian Presidential Academy of National Economy and Public Administration); Suleimanova, Mariana (Сулейманова, Мариана) (The Russian Presidential Academy of National Economy and Public Administration); Golovanova, Elizaveta (Голованова, Елизавета) (The Russian Presidential Academy of National Economy and Public Administration); Grebenkina, Alina (Гребёнкина, Алина) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: This study analyzed the main mechanisms for achieving consensus in distributed ledgers. Different types of distributed ledgers were classified according to the characteristics of who can form data chains and who has access to them. Such important applications of the distributed ledger (blockchain) as smart contracts were examined in detail, the principle of their work was described, the features of functioning on various platforms were systematized. Most of the work is devoted to a detailed review of the use of blockchain technology in the financial sector. Using the analysis of individual international and domestic practices as an example, the benefits of using the blockchain in the banking sector and in payment systems are analyzed. In conclusion, recommendations are given for economic policy in the field of blockchain technology implementation.
    Date: 2019–03
  5. By: Alessandro Annoni (European Commission - JRC); Peter Benczur (European Commission - JRC); Paolo Bertoldi; Blagoj Delipetrev; Giuditta De Prato; Claudio Feijoo; Enrique Fernandez Macias; Emilia Gomez Gutierrez; Maria Iglesias Portela; Henrik Junklewitz; Montserrat Lopez Cobo; Bertin Martens; Susana Figueiredo do Nascimento; Stefano Nativi; Alexandre Polvora; Jose Ignacio Sanchez Martin; Songul Tolan; Ilkka Tuomi; Lucia Vesnic Alujevic
    Abstract: We are only at the beginning of a rapid period of transformation of our economy and society due to the convergence of many digital technologies. Artificial Intelligence (AI) is central to this change and offers major opportunities to improve our lives. The recent developments in AI are the result of increased processing power, improvements in algorithms and the exponential growth in the volume and variety of digital data. Many applications of AI have started entering into our every-day lives, from machine translations, to image recognition, and music generation, and are increasingly deployed in industry, government, and commerce. Connected and autonomous vehicles, and AI-supported medical diagnostics are areas of application that will soon be commonplace. There is strong global competition on AI among the US, China, and Europe. The US leads for now but China is catching up fast and aims to lead by 2030. For the EU, it is not so much a question of winning or losing a race but of finding the way of embracing the opportunities offered by AI in a way that is human-centred, ethical, secure, and true to our core values. The EU Member States and the European Commission are developing coordinated national and European strategies, recognising that only together we can succeed. We can build on our areas of strength including excellent research, leadership in some industrial sectors like automotive and robotics, a solid legal and regulatory framework, and very rich cultural diversity also at regional and sub-regional levels. It is generally recognised that AI can flourish only if supported by a robust computing infrastructure and good quality data: • With respect to computing, we identified a window of opportunity for Europe to invest in the emerging new paradigm of computing distributed towards the edges of the network, in addition to centralised facilities. This will support also the future deployment of 5G and the Internet of Things. • With respect to data, we argue in favour of learning from successful Internet companies, opening access to data and developing interactivity with the users rather than just broadcasting data. In this way, we can develop ecosystems of public administrations, firms, and civil society enriching the data to make it fit for AI applications responding to European needs. We should embrace the opportunities afforded by AI but not uncritically. The black box characteristics of most leading AI techniques make them opaque even to specialists. AI systems are currently limited to narrow and well-defined tasks, and their technologies inherit imperfections from their human creators, such as the well-recognised bias effect present in data. We should challenge the shortcomings of AI and work towards strong evaluation strategies, transparent and reliable systems, and good human-AI interactions. Ethical and secure-by-design algorithms are crucial to build trust in this disruptive technology, but we also need a broader engagement of civil society on the values to be embedded in AI and the directions for future development. This social engagement should be part of the effort to strengthen our resilience at all levels from local, to national and European, across institutions, industry and civil society. Developing local ecosystems of skills, computing, data, and applications can foster the engagement of local communities, respond to their needs, harness local creativity and knowledge, and build a human-centred, diverse, and socially driven AI. We still know very little about how AI will impact the way we think, make decisions, relate to each other, and how it will affect our jobs. This uncertainty can be a source of concern but is also a sign of opportunity. The future is not yet written. We can shape it based on our collective vision of what future we would like to have. But we need to act together and act fast.
    Keywords: artificial intelligence, AI strategy, AI Techno-economic segment, Ethics, Legal, education, economic, cybersecurity, data strategies, computing architectures, energy, resilience
    Date: 2018–12
  6. By: Bin Grace Li; James McAndrews; Zhu Wang
    Abstract: It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a twosided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary significantly through the endogenous R&D channel.
    Date: 2019–03–18
  7. By: Gusev, Andrey (Гусев, Андрей) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: This paper is dedicated to identifying specific cost factors in the financial technology segment, including the study of cryptocurrency cost formation features based on the cost estimate and, based on practical case studies, developing recommendations describing the influence of important aspects on the choice of cryptocurrency investment strategy for further use in making effective management decisions.
    Keywords: fintech company, blockchain, cryptocurrency, mining cryptocurrency, investment in cryptocurrency, cost factors, intangible assets, cost management, financial technologies, innovative company, real options, ICO
    Date: 2019–03
  8. By: Gisela Mann
    Abstract: The aim of this research is to examine if consumer microfinance reduces levels of financial exclusion in the UK and to explore its impact on social inclusion. Despite an abundance of research on microfinance, it is largely based on lending for enterprise, with a developing country focus. There is a dearth of research in Europe which this study addresses by looking at a consumer microfinance institution (MFI) in the UK and assessing its ability (or not) to promote social and financial inclusion. Furthermore, what little research has been carried out has concluded that UK consumer microfinance offers ‘insignificant’ benefit (Lenton and Mosley, 2012:87), however this was based on poverty reduction, not financial inclusion. This work fills the gap in knowledge regarding European consumer microfinance and contributes to its ongoing debate (Corbucci, 2016). This original research, which is based on new data, leads to a greater understanding of the topic hitherto under- studied which others can subsequently build upon.Grounded Theory (GT) methodology was used, focussing on in-depth interviews with 31 participants from a UK-based MFI. GT generates understanding in fields with little prior literature (Glaser and Strauss, 1967). It is especially apt for reaching the aims because it approaches the field with no a priori assumptions. Instead, it accesses the opinions and experiences from service users who are best placed to ascertain if they feel more or less financially included and why. Also, its core analytical tool ensures that findings are rooted in data which is useful to counteract the assertion that the design of most microfinance research is flawed because it is looking for positive social outcomes (Bateman, 2010).The main findings are that participants experienced considerable improvements in financial and social inclusion despite poverty-line incomes and poor credit scores thus improving financial capacity and money management. The majority of lending is used for consumer consumption which meets core social needs and contributes to ‘lead(ing) a normal social life in the society in which they belong’ (European Commission, 2008:9). This leads to a higher standard of living resulting in important mental and physical health improvements as well as increasing self-esteem. These results provide empirical evidence demonstrating microfinance’s ability to promote financial and social inclusion. The limitation of the results are that they are not generalizable because of sample size. But it could be extended to include customers from a range of consumer-lending MFIs in the United Kingdom and across Europe to ascertain if the findings can be replicated. These findings represent cutting edge research in an unexplored field of European microfinance so will make a significant contribution upon which others can build future impact studies.
    Keywords: Consumption, Financial inclusion, Impact, Microfinance
    Date: 2019
  9. By: Morosanova, Anastasia (Моросанова, Анастасия) (The Russian Presidential Academy of National Economy and Public Administration); Morozov, Anton (Морозов, Антон) (The Russian Presidential Academy of National Economy and Public Administration); Shpakova, Anastasia (Шпакова, Анастасия) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Intercorporate electronic document management is one of the alternative means of communication and building interaction between organizations. Despite the relative prevalence of internal electronic document management (EDM) systems, intercorporate document management is confronted with some technical and psychological problems. The most activity of EDM operators is related to the circulation of electronic invoices than other legally significant documents, and this trend continues at the moment in all countries. For a comparative analysis of the regulation of intercorporate EDI, the countries of Scandinavia, Europe, North and Latin America, and the members of the BRICS were considered.
    Keywords: invoices, international electronic document circulation, world EDT experience, digital signature, digitalization, electronic document circulation
    Date: 2019–03
  10. By: Kuusi, Tero; Kulvik, Martti; Laiho, Maarit; Ropponen, Annina; Vähämäki, Maija
    Abstract: Abstract In this policy brief, we discuss the challenges of measuring productivity effects of automatization in a governmental payment service organization (The Finnish Government Shared Services Centre for Finance and HR, Palkeet) that has developed and applied digital robotics in work processes. To this end, we combine sociologic and economic research tools and traditions to provide a full picture of the transition. First, we analyse work at the level of individual tasks by using large-scale econometric models and HR-data; an approach that provides detailed digital job profiles for assessment. Secondly, we add the understanding of digital working by qualitative inquiry of employees’ meaning making of working with robots. Our study contributes to the discourses of management control and adaptation to change.
    Keywords: Automatization, Labour, Productivity, Services
    JEL: H11 H30 O33
    Date: 2019–03–27
  11. By: Matej Bajgar (OECD); Sara Calligaris (OECD); Flavio Calvino (OECD); Chiara Criscuolo (OECD); Jonathan Timmis (OECD)
    Abstract: The digital transformation forces a re-think of government policy as manufacturing business models increasingly transition from “bolts” to “bits”. The road to Industry 4.0 implies important and pervasive changes in business dynamics, firm growth and the nature of competition. This report presents a framework for measuring the digital transformation of manufacturing industries, and maps the impact of digital technologies across these several dimensions: firm productivity growth, business dynamism, industry concentration, firm mark-ups and mergers and acquisition activity. It suggests policies that governments can use to facilitate digital adoption and reap the benefits of the digital revolution in manufacturing.
    Date: 2019–04–05
  12. By: OECD
    Abstract: This paper aims to complement the OECD Recommendation of the Council on Consumer Protection in E-Commerce by elaborating on its key principles in the context of online advertising and offering practical guidance on how to apply these principles. For these purposes, the guide provides a number of good practice examples from policy makers, consumer enforcement agencies, and stakeholders that are relevant to the key principles. Building on those examples, the guide also offers tips for businesses in four areas of online advertising: (i) misleading marketing practices; (ii) ad identification; (iii) endorsements; and (iv) protection of children or vulnerable consumers.
    Date: 2019–03–28
  13. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study investigates linkages between the mobile phone, information sharing offices (ISO) and financial sector development in 53 African countries for the period 2004-2011. ISO are private credit bureaus and public credit registries. The empirical evidence is based on contemporary and non-contemporary quantile regressions. Two main hypotheses are tested: mobile phones complement ISO to enhance the formal financial sector (Hypothesis 1) and mobile phones complement ISO to reduce the informal financial sector (Hypothesis 2). The hypotheses are largely confirmed. This research adds to the existing body of literature by engaging hitherto unexplored dimensions of financial sector development and investigating the role of mobile phones in information sharing for financial sector development.
    Keywords: Information sharing; Banking sector development; Africa
    JEL: G20 G29 L96 O40 O55
    Date: 2019–01
  14. By: Katarzyna Gruszka; Andreas Novy
    Abstract: This article takes the case of Uber, a global platform specialized in transport technologies, to reappraise the claims of the sharing economy. The case presents a chronology of the struggles over the regulation of these digital markets in the US and France, using Uber's self-description and web discourse for additional illustrative purposes. It exposes Uber's business model, the key driving actors and their strategies as well as multi-scalar counter movements. The analysis is framed from a Hayekian and a Polanyian perspective, and the potential of the sharing economy to go beyond market fundamentalism. The Polanyian utopia of sharing as more than market relations based on self-interest is mobilized for legitimizing the platform. The Hayekian utopia of a market society which transforms social relations of friendship and community service into market activities is describing actual development. Finally, Polanyian "counter movements" are described and their potentials are discussed.
    Keywords: political economy, socio-economics, economic change, markets
    JEL: P16
    Date: 2018
  15. By: Montserrat Lopez-Cobo (European Commission - JRC); Giuditta De Prato (European Commission - JRC); Georgios Alaveras (European Commission - JRC); Riccardo Righi (European Commission - JRC); Sofia Samoili (European Commission - JRC); Jiri Hradec (European Commission - JRC); Lukasz Ziemba (European Commission - JRC); Katarzyna Pogorzelska (European Commission - JRC); Melisande Cardona (European Commission - JRC)
    Abstract: This study aims at supporting the policy initiatives to develop the availability in EC Member States of adequate advanced digital skills in a number of IT domains including Artificial Intelligence, High Performance Computing and Cybersecurity. By making use of the Techno-Economic Segments analytical approach developed under the PREDICT3 project (joint effort of EC JRC and DG CNECT), the study collects data and builds quantitative indicators to provide evidence based policy support. It addresses the mapping of digital skills in the mentioned technological domains from two complementary perspectives: the existing offer of academic courses (bachelor, master and doctoral programs), and the demand of profiles by industry as reflected by industry activity in the referred fields.
    Keywords: digital skills, industry demand, educational offer, artificial intelligence, cybersecurity, high performance computing, digital transformation
    Date: 2019–03
  16. By: Erik Brynjolfsson; Avinash Collis; W. Erwin Diewert; Felix Eggers; Kevin J. Fox
    Abstract: The welfare contributions of the digital economy, characterized by the proliferation of new and free goods, are not well-measured in our current national accounts. We derive explicit terms for the welfare contributions of these goods and introduce a new metric, GDP-B which quantifies their benefits, rather than costs. We apply this framework to several empirical examples including Facebook and smartphone cameras and estimate their valuations through incentive compatible choice experiments. For example, including the welfare gains from Facebook would have added between 0.05 and 0.11 percentage points to GDP-B growth per year in the US.
    JEL: D6 E2 O0 O4 O47
    Date: 2019–03
  17. By: Jin, Gu; Zhu, Tao
    Abstract: This paper draws quantitative implications for some historical coinage issues from an existing formulation of a theory that explains the society's demand for multiple denominations. The model is parameterized to match some key monetary characteristics in late medieval England. Inconvenience for an agent due to a shortage of a type of coin is measured by the difference between his welfare given the shortage and his welfare in a hypothetical scenario that the mint suddenly eliminates the shortage. A small coin has a more prominent role than small change. Because of this role, a shortage of small coins is highly inconvenient for poor people and, the inconvenience may extend to all people when commerce advances. A debasement may effectively supply substitutes to small coins in shortage. Large increase in the minting volume, cocirculation of old and new coins, and circulation by weight, critical facts constituting the debasement puzzle, emerge in the equilibrium path that follows the debasement.
    Keywords: The debasement puzzle; Gresham's Law; Medieval coinage; Commodity money; Coinage; Shortages of small coins
    JEL: E40 E42 N13
    Date: 2019–03–30
  18. By: W. Scott Frame; Larry Wall; Lawrence J. White
    Date: 2018
  19. By: World Bank Group
    Keywords: Information and Communication Technologies - Digital Divide Information and Communication Technologies - ICT Economics Information and Communication Technologies - Information Technology Information and Communication Technologies - Poverty Reduction & ICT Information and Communication Technologies - Telecommunications Infrastructure Macroeconomics and Economic Growth - Economic Growth Social Protections and Labor - Vocational & Technical Education
    Date: 2018–09
  20. By: Naude, Wim (UNU-MERIT, Maastricht University and MSM, and RWTH Aachen, and IZA Bonn)
    Abstract: After a number of AI-winters, AI is back with a boom. There are concerns that it will disrupt society. The immediate concern is whether labor can win a `race against the robots' and the longer-term concern is whether an artificial general intelligence (super-intelligence) can be controlled. This paper describes the nature and context of these concerns, reviews the current state of the empirical and theoretical literature in economics on the impact of AI on jobs and inequality, and discusses the challenge of AI arms races. It is concluded that despite the media hype neither massive jobs losses nor a `Singularity' are imminent. In part, this is because current AI, based on deep learning, is expensive and dificult for (especially small) businesses to adopt, can create new jobs, and is an unlikely route to the invention of a super-intelligence. Even though AI is unlikely to have either utopian or apocalyptic impacts, it will challenge economists in coming years. The challenges include regulation of data and algorithms; the (mis-) measurement of value added; market failures, anti-competitive behaviour and abuse of market power; surveillance, censorship, cybercrime; labor market discrimination, declining job quality; and AI in emerging economies.
    Keywords: Technology, artificial intelligence, productivity, labor demand, innovation, inequality
    JEL: O47 O33 J24 E21 E25
    Date: 2019–03–07
  21. By: Hanna Halaburda
    Date: 2018
  22. By: Juliane Begenau; Maryam Farboodi; Laura Veldkamp
    Date: 2018
  23. By: Amaral Garcia, Sofia; Nardotto, Mattia; Propper, Carol; Valletti, Tommaso
    Abstract: We study the effect of internet diffusion on childbirth procedures performed in England between 2000 and 2011. We exploit an identification strategy based on geographical discontinuities in internet access generated by technological factors. We show that broadband internet access increased Cesarean-sections: mothers living in areas with better internet access are 2.3 percent more likely to have a C-section than mothers living in areas with worse internet access. The effect is driven by first-time mothers who are 6.1 percent more likely to obtain an elective C-section. The increased C-section rate is not accompanied by changes in health care outcomes of mothers and newborns. Health care costs increased with no corresponding medical benefits for patients. Heterogeneity analysis shows that mothers with low income and low education are those more affected: thanks to the internet, they progressively close the C-section gap with mothers with higher income and education. We show evidence documenting the growing importance of the internet as a source of health related information, and we argue that patient's access to online information is changing the relationship between health care providers and patients.
    Keywords: c-sections; Information; internet
    Date: 2019–03
  24. By: Alek Tarkowski; Michal Sitek; Jan Strycharz; Riina Vuorikari (European Commission - JRC); Jonatan Castano Munoz (European Commission - JRC)
    Abstract: In order to draw evidence-based conclusions about publicly funded programmes and interventions, there is an interest in impact assessment. This Methodological Guide is meant to provide assistance on conducting evaluations of public initiatives focused on the provision of open digital textbooks. Such textbooks are in a digital format and made available publicly online. When funded through public funds, it becomes important to understand the possible costs and savings. Therefore, the Guide focuses on exploring the costs and savings associated with such initiatives, and on the other hand, estimating their impact on learning outcomes (e.g. exemplified as academic achievements). The Guide aims to be generic drawing on experiences gained from an independent evaluation of a Polish public program that produced open digital textbooks. Therefore, the methodology presented in this Guide can also be used to analyse programs focused on other types of digital content in education. The long-term aim of the Guide is to promote the proper evaluation of such initiatives in the future.
    Keywords: e-textbooks, digital resources, evaluation, impact on learning outcomes, impact on costs
    Date: 2019–03
  25. By: Dmitry Chervyakov; Jörg Rocholl
    Abstract: Crowdfunding markets around the world have experienced significant growth rates in recent years. With an aggregate amount of almost €50 billion raised worldwide between 2010 and 2017, crowdfunding has attracted increasing economic, political and regulatory attention on the international level. However, many questions remain open on the proper design, implementation and feasibility of these markets, of which there are four general types - debt, rewards, equity, and charity (ranked by their respective volumes). The first three types of crowdfunding are comparable to existing sources of traditional financing and either complement or substitute for these sources. Investors thus expect returns or other financial benefits from these types of crowdfunding. The fourth type – charity-based crowdfunding – is purely philanthropic. The United States and United Kingdom are responsible for the majority of crowdfunding transactions. The share of European Union markets (excluding the UK) is still low, with negligible cross-border activity. We argue that the lack of a clear and consistent regulatory framework in Europe is a major obstacle to the development of these markets. The European Commission proposed in March 2018 a set of measures aimed at addressing the major shortcomings of the current regulatory framework and employing instead an EU-wide regime (European Commission, 2018b). The Commission’s proposal moves in the right direction to provide a solid basis for the development of crowdfunding markets in Europe, but has at least three major shortcomings that need to be addressed. First, an EU-wide framework needs to have a precise and transparent legal definition of crowdfunding activities, eliminating any legal confusion for investors, enterprises and platforms. Second, such a framework requires a clear stance on investor protection. We suggest including in the proposal a more refined requirement for agents who want to invest more than a certain threshold amount to undertake a ‘qualified investor test’. Third, the proposal would limit crowdfunding offers to €1 million per project over a period of 12 months. We argue that this threshold is too restrictive and should be raised to €5 million in order to enable the frictionless development of investment-based crowdfunding in Europe.
    Date: 2019–03
  26. By: Emmanuel Lardeux (Air liquide France Industrie)
    Date: 2018–10–16
  27. By: Elie Bouri (USEK Business School, Holy Spirit University of Kaslik, Jounieh, Lebanon); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Chi Keung Marco Lau (Department of Accountancy, Finance and Economics, Huddersfield Business School, University of Huddersfield, Queensgate, Huddersfield, HD1 3DH, UK); David Roubaud (Montpellier Business School, Montpellier, France)
    Abstract: We study whether level of risk aversion can be used to predict Bitcoin returns. Using a copula-quantile approach, we find evidence of predictability for the lower and upper quantiles of the conditional distribution of returns (i.e., in bull and bear markets). To reveal the sign of the predictability, we apply the cross-quantilogram approach and find that the cross-quantilogram is similar when risk aversion is at the low or medium level for various quantiles of Bitcoin returns. In particular, we find positive predictability when the risk aversion is very low and at the medium level. However, the predictability becomes negative when both the risk aversion and Bitcoin returns are very high, suggesting that very high levels of risk aversion are likely to drive down Bitcoin returns in a bull market.
    Keywords: Risk-aversion, Bitcoin returns, price predictability, copulas, quantiles
    JEL: C22 G10
    Date: 2019–03
  28. By: Trunin, Pavel (Трунин, Павел) (The Russian Presidential Academy of National Economy and Public Administration); Kiyutsevskaya, Anna (Киюцевская, Анна) (The Russian Presidential Academy of National Economy and Public Administration); Narkevich, Sergey (Наркевич, Сергей) (The Russian Presidential Academy of National Economy and Public Administration); Inozemtsev, Eduard (Иноземцев, Эдуард) (The Russian Presidential Academy of National Economy and Public Administration); Hudko, Elizaveta (Худько, Елизавета) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: One of the most important issues of financial intermediaries` evolution as well as of the financial system as a whole is associated with the intensive introduction of fintech innovations. The study attempted to fill the existing gap related to a lack of understanding of the scope of fintech innovations and their classification, and to provide a comprehensive review of international experience, application practices and channels of influence of advanced technologies on traditional financial intermediaries, including central banks. Particular attention is paid to the features and trends in the development and regulation of fintech in Russia.
    Date: 2019–03
  29. By: Luyang Chen; Markus Pelger; Jason Zhu
    Abstract: We estimate a general non-linear asset pricing model with deep neural networks applied to all U.S. equity data combined with a substantial set of macroeconomic and firm-specific information. Our crucial innovation is the use of the no-arbitrage condition as part of the neural network algorithm. We estimate the stochastic discount factor (SDF or pricing kernel) that explains all asset prices from the conditional moment constraints implied by no-arbitrage. For this purpose, we combine three different deep neural network structures in a novel way: A feedforward network to capture non-linearities, a recurrent Long-Short-Term-Memory network to find a small set of economic state processes, and a generative adversarial network to identify the portfolio strategies with the most unexplained pricing information. Our model allows us to understand what are the key factors that drive asset prices, identify mis-pricing of stocks and generate the mean-variance efficient portfolio. Empirically, our approach outperforms out-of-sample all other benchmark approaches: Our optimal portfolio has an annual Sharpe Ratio of 2.1, we explain 8% of the variation in individual stock returns and explain over 90% of average returns for all anomaly sorted portfolios.
    Date: 2019–03
  30. By: Stjepan Begu\v{s}i\'c; Zvonko Kostanj\v{c}ar
    Abstract: The goal of this paper is to explore the relationship between momentum effects and liquidity in cryptocurrency markets. Portfolios based on momentum-liquidity bivariate sorts are formed and rebalanced on a varying number of cryptocurrencies through time. We find a strong momentum effect in the most liquid cryptocurrencies, which supports the theories of investor herding behavior. Moreover, we propose two profitable long-only strategies: the illiquid losers and liquid winners, which exhibit improved risk adjusted performance over the market capitalization weighted portfolio.
    Date: 2019–04
  31. By: Lawrence J. White
    Date: 2018

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.