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on Payment Systems and Financial Technology |
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Issue of 2019‒06‒17
38 papers chosen by |
| By: | Wandhöfer, Ruth (Tilburg University, School of Economics and Management) |
| Abstract: | The three essays collected in this PhD thesis discuss the implications of technology innovation for settlement finality, cross-border payments and money. The first essay investigates the topic of settlement finality in the context of Proof-of-Work (PoW) blockchains, exemplified by Bitcoin. This is of particular importance as final settlement plays a crucial role in removing settlement risk between counterparties in support of financial stability. The second essay explores whether and how technological innovation, in conjunction with policy measures, can improve the process of correspondent banking cross-border payments and develops a set of potential design scenarios for the future of this business. The third essay offers an alternative perspective on the future role of central bank money as a retail use digital complement to physical cash. The paper develops the rationale for a Eurosystem issued ‘Digital Euro’ and proceeds by delivering a blueprint for the design of such a solution. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:b7d8b24a-dbf4-4f82-b596-3e5fc2b52cc3&r=all |
| By: | Majid Bazarbash |
| Abstract: | Recent advances in digital technology and big data have allowed FinTech (financial technology) lending to emerge as a potentially promising solution to reduce the cost of credit and increase financial inclusion. However, machine learning (ML) methods that lie at the heart of FinTech credit have remained largely a black box for the nontechnical audience. This paper contributes to the literature by discussing potential strengths and weaknesses of ML-based credit assessment through (1) presenting core ideas and the most common techniques in ML for the nontechnical audience; and (2) discussing the fundamental challenges in credit risk analysis. FinTech credit has the potential to enhance financial inclusion and outperform traditional credit scoring by (1) leveraging nontraditional data sources to improve the assessment of the borrower’s track record; (2) appraising collateral value; (3) forecasting income prospects; and (4) predicting changes in general conditions. However, because of the central role of data in ML-based analysis, data relevance should be ensured, especially in situations when a deep structural change occurs, when borrowers could counterfeit certain indicators, and when agency problems arising from information asymmetry could not be resolved. To avoid digital financial exclusion and redlining, variables that trigger discrimination should not be used to assess credit rating. |
| Date: | 2019–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:19/109&r=all |
| By: | Carlo Gola; Andrea Caponera |
| Abstract: | This paper describes the economic characteristics of crypto-assets and the regulation of the exchanges and custodian wallet providers adopted in various jurisdictions. The possible accounting and prudential treatments are then analysed. The paper provides a taxonomy of DLT digital tokens based on mutually exclusive classes. Bitcoin belongs to the class of private digital tokens with no underlining claim or liability against an issuer, exchangeable at a floating rate, which operate through an electronic protocol called permissionless distributed ledger technology (DLT). The literature on the subject shows that this type of crypto-assets do not fall within the category of money and financial instruments. The instability of their price must be considered when evaluating these instruments from an accounting and prudential point of view. The paper describes the basic features of initial coin offerings (ICOs), smart contracts, and other related aspects. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:liu:liucec:2019-7&r=all |
| By: | Efobi, Uchenna; Beecroft, Ibukun; Belmondo, Tanankem; Katan, Amelia |
| Abstract: | Transitioning to an electronic system for tax administration and collection is a welcome development in countries that have hitherto faced difficulty in raising tax revenue. Countries like those in sub-Saharan Africa, for instance, account for about 16 percent of GDP from tax revenue, while Nigeria records 1.48 percent of its GDP from tax revenue (World Bank, 2018). The electronic tax system is advantageous considering that it: i) improves turnaround time in the tax administration system as information is instantly available to tax authorities; ii) lowers cost of tax collection for revenue authorities; iii) raises transparency of business transactions for tax filing purposes; iv) reduces public officials’ discretionary input in service delivery; v) aids in combating corrupt practices. The Integrated Tax Administration System (ITAS) is a tax administration initiative in Nigeria aimed at simplifying and automating all tax administration processes – such as filing tax returns and paying taxes online through the ITAS portal. It was implemented in 2017 with firms expected to adopt this system voluntarily. With the introduction of this system, its effectiveness in achieving its objective and the extent to which taxpayers will adopt this system is not clear. The basis for this fuzzy expectation is because the Nigerian public has a history of low adoption of finance related electronic systems. For instance, the mobile money service introduced by the Central Bank in 2011 has seen a dismal adoption rate of about 13 percent. Further, using the internet to pay bills, mobile money accounts, and even the use of mobile devices to access financial institution accounts or any other account is below 10 percent in Nigeria. Given this background, this study examines the extent of awareness of small businesses about ITAS, and factors that motivate them to adopt this system. We focused on the internal management characteristics, internal organisation of the small businesses and the external environment, while controlling for other important covariates. To achieve this objective, the survey was gathered from seven states in the south-west region of Nigeria between June and August 2018. The underlying motivation for focusing on small businesses is because they constitute a huge proportion of the Nigerian tax net. The number of small businesses in Nigeria was estimated at 72,838 in 2013, which constitutes the largest proportion of all Nigerian businesses aside from micro enterprises (SMEDAN/NBS, 2013). This is a summary of ATAP Working Paper 8 by Uchenna Efobi, Ibukun Beecroft and Tanankem Belmondo with Amelia Katan. |
| Keywords: | Economic Development, Finance, Governance, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:idq:ictduk:14530&r=all |
| By: | Stanis{\l}aw Dro\.zd\.z; Ludovico Minati; Pawe{\l} O\'swi\k{e}cimka; Marek Stanuszek; Marcin W\k{a}torek |
| Abstract: | Based on the high-frequency recordings from Kraken, a cryptocurrency exchange and professional trading platform that aims to bring Bitcoin and other cryptocurrencies into the mainstream, the multiscale cross-correlations involving the Bitcoin (BTC), Ethereum (ETH), Euro (EUR) and US dollar (USD) are studied over the period between July 1, 2016 and December 31, 2018. It is shown that the multiscaling characteristics of the exchange rate fluctuations related to the cryptocurrency market approach those of the Forex. This, in particular, applies to the BTC/ETH exchange rate, whose Hurst exponent by the end of 2018 started approaching the value of 0.5, which is characteristic of the mature world markets. Furthermore, the BTC/ETH direct exchange rate has already developed multifractality, which manifests itself via broad singularity spectra. A particularly significant result is that the measures applied for detecting cross-correlations between the dynamics of the BTC/ETH and EUR/USD exchange rates do not show any noticeable relationships. This may be taken as an indication that the cryptocurrency market has begun decoupling itself from the Forex. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.07834&r=all |
| By: | Carlos A. Arango-Arango (Banco de la República de Colombia); Nicolás F. Suárez-Ariza (Banco de la República de Colombia) |
| Abstract: | Even though the levels and growth rates of adoption of digital payments have reached significant figures in the recent past, the demand for cash continues to grow in both developed and developing economies across the world. This puzzle has found only partial explanations in the previous empirical literature. We bring further and more conclusive evidence that the adoption of digital payments indeed reduces the demand for cash. Yet, economic growth and lower interest rates as well as positive trends in the demand for large denomination banknotes, not explained by traditional factors, still dominate the overall growth in the demand for cash. **** RESUMEN: Aun cuando los niveles y tasas de crecimiento de la adopción de pagos digitales han alcanzado valores signicativos en el pasado reciente, la demanda por efectivo continua creciente tanto en economías desarrolladas como en desarrollo alrededor del mundo. Este acertijo solo ha encontrado explicaciones parciales en la literatura previa. Nosotros proveemos evidencia adicional y más concluyente de que la adopción de pagos digitales reduce la demanda por efectivo. Sin embargo, el crecimiento económico y las menores tasas de interés, así como las tendencias positivas en la demanda por billetes de alta denominación, no explicadas por variables tradicionales, aun dominan el crecimiento agregado en la demanda de efectivo. |
| Keywords: | money demand, digital payments, cash, denominational structure, panel data, demanda de dinero, pagos digitales, efectivo, estructura denominacional, datos panel |
| JEL: | E41 E42 E47 E58 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:1074&r=all |
| By: | Marius Schwartz (Department of Economics, Georgetown University); Daniel R. Vincent (Department of Economics, University of Maryland) |
| Abstract: | We analyze competing strategic platforms setting fees to a local monopolist merchant and cash-back rebates to end users, when the merchant may not surcharge platforms’ customers, a rule imposed by some credit card networks. Each platform has an incentive to gain transactions by increasing the spread between its merchant fee and user rebate above its rival’s spread. This incentive yields non-existence of pure strategy equilibrium in many natural environments. In some circumstances, there is a mixed strategy equilibrium where platforms choose fee structures that induce the merchant to accept only one platform with equal probability, a form of monopolistic market allocation. |
| Keywords: | Platform price competition; rebates; no surcharge; payment networks; credit cards. |
| JEL: | L13 L41 L42 D43 |
| Date: | 2019–06–11 |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~19-19-03&r=all |
| By: | Seppälä, Timo; Mattila, Juri; Rajala, Risto |
| Abstract: | Abstract It is predicted that in 2030, the energy consumption of the ICT sector will be 21% of the world’s energy consumption, but will resources be enough to carry out all the digital technology development trends at the same time? Trends, such as the transition to the ecommerce, the transition of mobile services to the fifth-generation network, video streaming, online gaming and the rise of electric cars, all increase the need for both storage and computing capacity and energy as well. More broadly, the geographical location of digital resources and infrastructures has implications to country’s security of supply, for example in systems of systems development of smart traffic. The ecological effects of digitalization should also be explored through the lens of digital ecology and sustainability. |
| Keywords: | ICT, Energy efficiency, Computing capacity, Emissions trading, Security of supply |
| JEL: | O3 O33 Q4 Q5 |
| Date: | 2019–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:rif:briefs:80&r=all |
| By: | Markus K. Brunnermeier, Dirk Niepelt |
| Abstract: | We develop a generic model of money and liquidity that identi es sources of liquidity bubbles and seignorage rents. We provide sucient conditions under which a swap of monies leaves the equilibrium allocation and price system unchanged. We apply the equivalence result to the \Chicago Plan," cryptocurrencies, the Indian de-monetization experiment, and Central Bank Digital Currency (CBDC). In particular, we show why CBDC need not undermine nancial stability. |
| Keywords: | Money creation, monetary system, inside money, outside money, equivalence, CBDC, Chicago Plan, sovereign money |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:ube:dpvwib:dp1903&r=all |
| By: | C\'elestin Coquid\'e; Jos\'e Lages; Dima L. Shepelyansky |
| Abstract: | We construct the Google matrices of bitcoin transactions for all year quarters during the period of January 11, 2009 till April 10, 2013. During the last quarters the network size contains about 6 million users (nodes) with about 150 million transactions. From PageRank and CheiRank probabilities, analogous to trade import and export, we determine the dimensionless trade balance of each user and model the contagion propagation on the network assuming that a user goes bankrupt if its balance exceeds a certain dimensionless threshold $\kappa$. We find that the phase transition takes place for $\kappa 0.55$ almost all users remain safe. We find that even on a distance from the critical threshold $\kappa_c$ the top PageRank and CheiRank users, as a house of cards, rapidly drop to the bankruptcy. We attribute this effect to strong interconnections between these top users which we determine with the reduced Google matrix algorithm. This algorithm allows to establish efficiently the direct and indirect interactions between top PageRank users. We argue that this study models the contagion on real financial networks. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.01293&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Jacinta C. Nwachukwu (Preston, United Kingdom) |
| Abstract: | The overarching question tackled in this paper is: to what degree has financial development contributed to providing opportunities of human development for those on low-incomes and by what information technology mechanisms? We systematically review about 180 recently published papers to provide recent information technology advances in finance for inclusive development. Retained financial innovations are structured along three themes. They are: (i) the rural-urban divide, (ii) women empowerment and (iii) human capital in terms of skills and training. The financial instruments are articulated with case studies, innovations and investment strategies with particular emphasis, inter alia on: informal finance, microfinance, mobile banking, crowdfunding, microinsurance, Islamic finance, remittances, Payment for Environmental Services (PES) and the Diaspora Investment in Agriculture (DIA) initiative. |
| Keywords: | Finance; Inclusive Growth; Economic Development |
| JEL: | G20 I10 I20 I30 O10 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/040&r=all |
| By: | Martin Obschonka; David B. Audretsch |
| Abstract: | While the disruptive potential of artificial intelligence (AI) and Big Data has been receiving growing attention and concern in a variety of research and application fields over the last few years, it has not received much scrutiny in contemporary entrepreneurship research so far. Here we present some reflections and a collection of papers on the role of AI and Big Data for this emerging area in the study and application of entrepreneurship research. While being mindful of the potentially overwhelming nature of the rapid progress in machine intelligence and other Big Data technologies for contemporary structures in entrepreneurship research, we put an emphasis on the reciprocity of the co-evolving fields of entrepreneurship research and practice. How can AI and Big Data contribute to a productive transformation of the research field and the real-world phenomena (e.g., 'smart entrepreneurship')? We also discuss, however, ethical issues as well as challenges around a potential contradiction between entrepreneurial uncertainty and rule-driven AI rationality. The editorial gives researchers and practitioners orientation and showcases avenues and examples for concrete research in this field. At the same time, however, it is not unlikely that we will encounter unforeseeable and currently inexplicable developments in the field soon. We call on entrepreneurship scholars, educators, and practitioners to proactively prepare for future scenarios. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.00553&r=all |
| By: | Matthieu BOUSSICHAS (Ferdi); Vincent NOSSEK (Ferdi) |
| Abstract: | L’évolution erratique de la monnaie Bitcoin a récemment jeté un coup de projecteur sur la technologie blockchain dont la célèbre cryptomonnaie est l’application la plus connue. Présentée comme une révolution disruptive par ses promoteurs, cette technologie permet la création de registres numériques infalsifiables, immuables et historicisés, et promets de pallier le déficit de confiance qui freine trop souvent les transactions. Cette note présente brièvement le concept de blockchain et en discute les implications en matière de coopération au développement. Sur le papier, l’intérêt de mettre en place un tel registre numérique est effectivement important. Pour le développement, une blockchain a principalement quatre applications possibles. Elle peut être utilisée comme outil de transfert de valeurs pour réduire le coût, accélérer la rapidité et améliorer la traçabilité des transactions. Elle peut également être utilisée comme outil de suivi de projets, d’identification d’individus ou d’enregistrement de droits de propriétés ou de sociétés. Cette technologie pourrait ainsi contribuer à faciliter ces services et réduire fortement le coût de leur délivrance. Elle permet en outre la mise en place de contrats à exécution automatisée, notamment dans le secteur de l’assurance. Elle offre enfin des perspectives de désintermédiation financière en promettant de relier directement investisseurs et emprunteurs. Le potentiel de gains d’efficacité et de transparence explique l’intérêt croissant pour la blockchain. Cependant, de nombreuses limites freinent encore son déploiement à grande échelle : elle nécessite des besoins importants en infrastructures télécom et un réseau électrique fiable, elle engendre aujourd’hui une consommation d’énergie très élevée, et sa gouvernance et sa régulation par les autorités publiques posent question. Considérée aujourd’hui comme immature, elle semble prometteuse sous conditions. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:fdi:wpaper:4813&r=all |
| By: | Jeremiah O. Ejemeyovwi (Covenant University, Ota, Ogun State, Nigeria); Evans S. Osabuohien (Covenant University, Ota, Ogun State, Nigeria) |
| Abstract: | This paper empirically investigates the role of mobile technology adoption on inclusive growth in 15 West African countries with a view to ascertaining if the positive role of mobile technology adoption on human development as established in other regions holds in West Africa. It used data from World Development Indicators for the period 2004 to 2014, which was estimated with system generalised method of moments (SGMM). The SGMM results show that mobile cell subscription has a statistically insignificant effect on inclusive growth in West Africa which refutes the positive and significant role of mobile technology adoption on inclusive growth. The possible reasons for the results and recommendations are documented in the study. |
| Keywords: | ICT; Inclusive growth; Mobile technology; SGMM. |
| JEL: | O3 O15 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/028&r=all |
| By: | Uchenna R. Efobi (Covenant University, Nigeria); Belmondo V. Tanankem (MINEPAT, Yaoundé, Cameroon); Simplice A. Asongu (University of Cape Town, Cape Town, South Africa) |
| Abstract: | This study complements existing literature by investigating how the advancement in information and communication technology affects the formal economic participation of women. The focus is on 48 African countries for the period 1990-2014. The empirical evidence is based on Ordinary Least Squares, Fixed Effects and the Generalized Method of Moments regressions. The results show that improving communication technology increases female economic participation with the following consistent order of increasing magnitude: mobile phone penetration; internet penetration, and fixed broadband subscriptions. The findings are robust to the control for heterogeneities across countries. Policy implications are discussed. |
| Keywords: | Africa; Gender; ICT; Inclusive development; Technology |
| JEL: | G20 I10 I32 O40 O55 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/005&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Sara le Roux (Oxford, UK.); Jacinta Nwachukwu (Preston, United Kingdom); Chris Pyke (Preston, United Kingdom) |
| Abstract: | Purpose- This study presents theoretical and empirical arguments for the role of mobile telephony in promoting good governance in 47 sub-Saharan African countries for the period 2000-2012. Design/methodology/approach- The empirical inquiry uses an endogeneity-robust GMM approach with forward orthogonal deviations to analyse the linkage between mobile phone usage and the variation in three broad governance categories — political, economic and institutional. Findings- Three key findings are established: First, in terms of individual governance indicators, mobile phones consistently stimulated good governance by the same magnitude, with the exception of the effect on the regulation component of economic governance. Second, when indicators are combined, the effect of mobile phones on general governance is three times higher than that on the institutional governance category. Third, countries with lower levels of governance indicators are catching-up with their counterparts with more advanced dynamics. Originality/value- The study makes both theoretical and empirical contributions by highlighting the importance of various combinations of governance indicators and their responsiveness to mobile phone usage. |
| Keywords: | comparative study, ICT, IT diffusion and adoption |
| JEL: | G20 O38 O40 O55 P37 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/029&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | This study assesses linkages between social media and governance dynamics in 49 African countries for the year 2012. The empirical evidence is based on ordinary least squares and quantile regressions. Ten bundled and unbundled governance dynamics are used, notably: (i) political governance (entailing “voice & accountability†and political stability/no violence); (ii) economic governance (involving regulation quality and government effectiveness); (iii) institutional governance (comprising the rule of law and corruption-control) and (iv) general governance (entailing political, economic and institutional governance). Social media is measured with Facebook penetration. The findings show that Facebook penetration is positively associated with governance dynamics and these positive nexuses differ in terms of significance and magnitude of significance throughout the conditional distribution of the governance dynamics. |
| Keywords: | Governance; Social media; Africa |
| JEL: | G20 O38 O40 O55 P37 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/039&r=all |
| By: | Di Wang; Qi Wu; Wen Zhang |
| Abstract: | This paper takes a deep learning approach to understand consumer credit risk when e-commerce platforms issue unsecured credit to finance customers' purchase. The "NeuCredit" model can capture both serial dependences in multi-dimensional time series data when event frequencies in each dimension differ. It also captures nonlinear cross-sectional interactions among different time-evolving features. Also, the predicted default probability is designed to be interpretable such that risks can be decomposed into three components: the subjective risk indicating the consumers' willingness to repay, the objective risk indicating their ability to repay, and the behavioral risk indicating consumers' behavioral differences. Using a unique dataset from one of the largest global e-commerce platforms, we show that the inclusion of shopping behavioral data, besides conventional payment records, requires a deep learning approach to extract the information content of these data, which turns out significantly enhancing forecasting performance than the traditional machine learning methods. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.01923&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon) |
| Abstract: | Sustainable development within the investigated context includes the ability of African countries to meet the present economic, social and environmental needs without compromising the ability of future generations to meet their own needs. A challenging contemporary policy syndrome is the lack of funding for adequate capacities and structures essential for the realisation of the post-2015 development agenda. This introductory chapter provides highlights on all chapters covered by the book in the direction of addressing the underlying policy syndrome. |
| Keywords: | finance; sustainable development; Africa |
| JEL: | B20 F35 F50 O10 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/021&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | This study assesses human development thresholds at which mobile banking mitigates poverty and inequality in 93 developing countries for the year 2011. Mobile banking entails: ‘mobile used to pay bills’ and ‘mobile used to receive/send money’, while the modifying policy indicator is the human development index (HDI). The empirical evidence is based on interactive quantile regressions. A summary of the findings shows that with increasing human development: (i) ‘mobiles used to pay bills’ contribute to reducing inequality in countries at the bottom and top ends of the inequality distribution, while (ii) ‘mobiles used to receive/send money’ have an appealing role in promoting inclusive development in all poverty distributions, with the exception of the top-end or 90th decile. The modifying thresholds of the HDI vary from 0.542 to 0.632 and 0.333 to 0.705 in inequality and poverty specifications, respectively. The relevance of the findings is discussed in light of the current transition from Millennium Development Goals to Sustainable Development Goals. |
| Keywords: | Mobile banking, Quality of growth, poverty, inequality |
| JEL: | G20 O40 I10 I20 I32 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/022&r=all |
| By: | Bertani, Filippo; Ponta, Linda; Raberto, Marco; Teglio, Andrea; Cincotti, Silvano |
| Abstract: | During the last twenty years, we have witnessed the deep development of digital technologies. Artificial intelligence, software and algorithms have started to impact more and more frequently in our daily lives and most people didn't notice it. Recently, economists seem to have perceived that this new technological wave could have some consequences, but which one are they? Will they be positive or negative? In this paper we try to give a possible answer to these questions through an agent based computational approach; more specifically we enriched the large-scale macroeconomics model EURACE with the concept of digital technologies in order to investigate the effect that their business dynamics have at a macroeconomic level. Our preliminary results show that this productivity increase could be a double-edged sword: notwithstanding the development of the digital technologies sector can create new job opportunities, at the same time, these products could jeopardize the employment inside the traditional mass-production system. |
| Keywords: | Intangible assets, Industry 4.0, Digital revolution, Agent-based macroeconomics |
| JEL: | C63 O33 |
| Date: | 2019–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94205&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Agyenim Boateng (Glasgow Caledonian University, Glasgow, UK) |
| Abstract: | The primary objective of this special issue is to showcase high-quality interdisciplinary research in the field of mobile phone technology and inclusive economic development, with a view to inspire and educate readers and policy makers on the vital role of mobile phones in economic development in Africa. We hope that the articles in this special issue will encourage academics and policy makers to carry out more research on the challenges and opportunities mobile phone technology offers in our quest to develop our communities. |
| Keywords: | Inequality; ICT; Financial development; Africa |
| JEL: | I30 L96 O16 O55 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:18/018&r=all |
| By: | Utpal Bhattacharya (Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Wei-Yu Kuo (National Chengchi University); Tse-Chun Lin (University of Hong Kong); Jing Zhao (Hong Kong Polytechnic University) |
| Abstract: | Do superstitious traders lose money? We answer this question in the context of trading in the Taiwan Futures Exchange, where we exploit the Chinese superstition that the number â8â is lucky and the number â4â is unlucky. We find that individual investors, but not institutional investors, submit disproportionately more limit orders at â8â than at â4.â This imbalance, defined as âsuperstition indexâ for each investor, is positively correlated with trading losses. Superstitious investors lose money mainly because of their bad market timing and stale orders. Nevertheless, the reliance on number superstition for limit order submissions does decrease with trading experience. |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:hku:wpaper:201962&r=all |
| By: | Markus K. Brunnermeier (Princeton University, CEPR, CESifo, NBER); Dirk Niepelt (Study Center Gerzensee, University of Bern, CEPR, CESifo) |
| Abstract: | We develop a generic model of money and liquidity that identifies sources of liquidity bubbles and seignorage rents. We provide suffcient conditions under which a swap of monies leaves the equilibrium allocation and price system unchanged. We apply the equivalence result to the "Chicago Plan," cryptocurrencies, the Indian de-monetization experiment, and Central Bank Digital Currency (CBDC). In particular, we show why CBDC need not undermine financial stability. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:szg:worpap:1905&r=all |
| By: | Paul Belleflamme; Martin Peitz |
| Abstract: | We consider two-sided platforms with the feature that some users on one or both sides of the market lack information about the price charged to participants on the other side of the market. With positive cross-group external effects, such lack of price information makes demand less elastic. A monopoly platform does not benefit from opaqueness and optimally reveals price information. contrast, in a two-sided singlehoming duopoly, platforms benefit from opaqueness and, thus, do not have an incentive to disclose price information. In competitive bottleneck markets, results are more nuanced: if one side is fully informed (for exogenous reasons), platforms may decide to inform users on the other side either fully, partially or not at all, depending on the strength of cross-group external effects and the degree of horizontal differentiation. |
| Keywords: | price transparency; two-sided markets; competitive bottleneck; platform competition; price information; strategic disclosure |
| JEL: | D43 L12 L13 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2019_099&r=all |
| By: | OECD |
| Abstract: | This report synthesises an OECD project to develop a framework and a set of statistical indicators that can be used to assess the digital security (cybersecurity) risk management practices of businesses. A survey instrument aligned with the framework was developed and piloted. After a general introduction, the report starts with a brief overview of the state of affairs in the measurement of digital security risk and its management prior to the OECD project. It provides an in-depth explanation of the measurement framework for the assessment of digital security risk management practices in businesses and an analysis of the outcomes of a pilot survey instrument based on the measurement framework, tested with members of the Federation of European Risk Management Associations (FERMA) in 2018. The conclusion of the report provides recommendations for future efforts that build on this project. |
| Date: | 2019–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:283-en&r=all |
| By: | Jamal Bouoiyour (IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau, CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour); Refk Selmi (IRMAPE - Institut de Recherche en Management et Pays Emergents - ESC Pau, CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour) |
| Abstract: | Bitcoin futures were launched by the Chicago Board of Options Exchange and the Chicago Mercantile Exchange group on December 18th, 2017. This study stands as a first attempt to explore the reactions of Bitcoin spot market to the launch of futures contracts. Using an event-study methodology and an adjusted asset pricing model, we show that Futures trading drove up the price of Bitcoin immediately after the announcement day. This reaction started to decrease noticeably following the launch of the futures contracts. Such outcome seems in line with the trading behavior that typically accompanies the launch of futures markets for an asset. |
| Keywords: | The lunch of future contracts,Bitcoin price,Improved event study methodology |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02126234&r=all |
| By: | Sam Haltenhof (University of Michigan) |
| Abstract: | Internet connectivity and exports of services are positively correlated. This paper presents a gravity model with bilateral measures of Internet connectivity to formalize this correlation. To establish bilateral connectivity, I construct a novel dataset based on the undersea fiber-optic cable network responsible for 99% of international data traffic. I measure the degree of bilateral connectivity using information on the capacities of these cables in order to estimate the effect of that connection on export growth between pairs of digitally connected countries. I estimate a positive relationship between Internet connectivity and bilateral exports in data-intensive industries with an elasticity of 0.25 to 2.25 over a variety of possible settings. |
| Keywords: | Internet, trade in services, gravity |
| JEL: | F14 |
| URL: | http://d.repec.org/n?u=RePEc:mie:wpaper:668&r=all |
| By: | Jonathan McCay; Marcia France; Loretta Lujan; Vicki Maestas; Alix Whittaker |
| Abstract: | This brief describes the development of and lessons learned from an innovative strategy designed by the county’s Colorado Works team to address these transportation challenges and coach parents on planning and achieving their goals at the same time. |
| Keywords: | transportation, rural, coaching, innovation, human service, community partnerships |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:cbb796d51d1b4efdbcb11f59fa309c80&r=all |
| By: | Waknis, Parag |
| Abstract: | A surprise demonetization, where certain or all denominations of currency notes cease to be legal tender on a short notice, can be understood as a severe payment system shock requiring agents to immediately shift to alternative payment mechanisms. I use a short-term macroeconomic model based on Willamson (2009) featuring goods and financial market segmentation to analyze the effect of such a shock in an economy with substantial informality and cash dependence. The quantitative characterization of the equilibrium dynamics using a deterministic example shows significant level as well as redistributive effects in the very short run. The households with access to formal financial markets experience an increase in consumption and those without such access experience a decline. Most of these effects come from differential access to formal financial markets as a consumption smoothing mechanism. |
| Keywords: | demonetization, segmented markets, payments systems |
| JEL: | E26 E42 E52 |
| Date: | 2019–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:94171&r=all |
| By: | Ögren, Anders (Department of Economic History, Lund University) |
| Abstract: | A currency union is when several independent sovereign nations share a common currency. This has been a recurring phenomenon in monetary history. In this article I study the theoretical foundations of such unions, and discuss some important currency unions in history, most notably the case of the US. Finally I contrast the design of the EMU with economic theories and historical experiences of currency unions. |
| Keywords: | Central banks; Fiscal systems; Monetary theory; Monetary policy; Optimum Currency Areas |
| JEL: | E42 F33 N11 N13 |
| Date: | 2019–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0204&r=all |
| By: | Lehuedé, Héctor J. |
| Abstract: | This paper describes and discusses the relation between cybersecurity and corporate governance with a special interest on data protection in Latin America and the Caribbean. The motivation for the work resides in the growing role that data protection and privacy laws and regulations in developed countries reserve for corporate governance. These laws increasingly assign responsibilities to boards of directors and management with the expectation to incentivize firms to take data protection seriously in the face of cybersecurity and privacy risks. The paper presents these new rules and explores their current and potential use in the region, focusing on the rules and practices on data protection by Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Uruguay. The paper was commissioned by the United Nations’ Economic Commission for Latin America and the Caribbean, ECLAC. |
| Keywords: | ADMINISTRACION DE EMPRESAS, GOBERNABILIDAD CORPORATIVA, PROTECCION DE DATOS, LEYES Y REGLAMENTOS, TECNOLOGIA DE LA INFORMACION, TECNOLOGIA DE LAS COMUNICACIONES, BUSINESS MANAGEMENT, CORPORATE GOVERNANCE, DATA PROTECTION, LAWS AND REGULATIONS, INFORMATION TECHNOLOGY, COMMUNICATION TECHNOLOGY |
| Date: | 2019–06–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col026:44629&r=all |
| By: | Xue Guo; Hu Zhang; Tianhai Tian |
| Abstract: | Development of stock networks is an important approach to explore the relationship between different stocks in the era of big-data. Although a number of methods have been designed to construct the stock correlation networks, it is still a challenge to balance the selection of prominent correlations and connectivity of networks. To address this issue, we propose a new approach to select essential edges in stock networks and also maintain the connectivity of established networks. This approach uses different threshold values for choosing the edges connecting to a particular stock, rather than employing a single threshold value in the existing asset-value method. The innovation of our algorithm includes the multiple distributions in a maximum likelihood estimator for selecting the threshold value rather than the single distribution estimator in the existing methods. Using the Chinese Shanghai security market data of 151 stocks, we develop a stock relationship network and analyze the topological properties of the developed network. Our results suggest that the proposed method is able to develop networks that maintain appropriate connectivities in the type of assets threshold methods. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.08088&r=all |
| By: | Shota Ichihashi |
| Abstract: | I study the welfare and price implications of consumer privacy. A consumer discloses information to a multi-product seller, which learns about the consumer’s preferences, sets prices, and makes product recommendations. While the consumer benefits from accurate product recommendations, the seller may use the information to price discriminate. I show that the seller prefers to commit to not using consumer information for pricing to encourage information disclosure. However, this commitment hurts the consumer, who could be better off by pre-committing to withhold some information. In contrast to single-product models, total surplus may be lower if the seller can base prices on information. |
| Keywords: | Economic models |
| JEL: | D82 D83 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:19-22&r=all |
| By: | Luis Guimaraes; Pedro Mazeda Gil |
| Abstract: | We propose a simple model to assess the evolution of the US labor share and how automation affects employment. In our model, heterogeneous firms may choose a manual technology and hire a worker subject to matching frictions. Alternatively, they may choose an automated technology and produce using only machines (robots). Our model offers three main insights. First, automation-augmenting shocks reduce the labor share but increase employment and wages. Second, labor market institutions play an almost insignificant role in explaining the labor share. Third, the US labor share only (clearly) fell after 1987 because of a contemporaneous acceleration of automation's productivity. |
| Keywords: | Automation; Labor Share; Technology Choice; Employment; Matching Frictions |
| JEL: | E24 J64 L11 O33 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:qub:wpaper:1901&r=all |
| By: | Wong, Stephen; Shaheen, Susan PhD |
| Abstract: | In many evacuations including wildfire evacuations, public agencies often do not have enough resources to evacuate and shelter all citizens. Consequently, we propose that the sharing economy, through private companies and/or private citizens, could be leveraged in disasters for transportation and sheltering resources. To assess this feasibility, we distributed surveys to individuals impacted by three major wildfires in California: 1) the 2017 October Northern California Wildfires (n=79), 2) the 2017 December Southern California Wildfires (n=226), and 3) the 2018 Carr Wildfire (n=284). Using these data, we find that private citizens are moderately to highly likely to share transportation and sheltering resources in future disasters, but numerous reservations persist about sharing. We also find significant spare capacity in evacuating vehicles and potential homes. To supplement this work, we also conducted four focus groups (n=37) of vulnerable populations to determine the benefits and limitations of a sharing economy strategy in terms of equity. Groups included low-income (2017 December Southern California Wildfires), older adult (2017 October Northern California Wildfires), individuals with disabilities (2017 October Northern California Wildfires), and Spanish-speaking (2018 Mendocino Complex Wildfire). We find that while severe equity limitations exist, groups were able to develop several recommendations for successfully leveraging sharing economy resources for the general population and their specific vulnerable group. We conclude with several local agency and statewide recommendations for building a sharing economy framework for California to prepare for future evacuations. |
| Keywords: | Engineering, Evacuations, wildfires, sharing economy, shared mobility, homesharing, ride sourcing, TNCs, equity, disasters and emergency operations, California |
| Date: | 2019–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:itsrrp:qt16s8d37x&r=all |
| By: | Bernard Poirine (GDI - Gouvernance et développement insulaire - UPF - Université de la Polynésie Française); Vincent Dropsy (GDI - Gouvernance et développement insulaire - UPF - Université de la Polynésie Française) |
| Abstract: | This paper presents a model in which remittances stem from a decision made jointly by a family coalition of multiple migrants and non-migrants, allowing two alternative interpretations: migrants' altruism or bargaining power. The model predicts that aggregate remittances first increase, reach a maximum, and then decrease as the emigration ratio (migrants/non-migrants) increases. An alternative model of loan repayment arrangement between each migrant and her parents, predicts that aggregate remittances grow monotonously with the emigration ratio. Testing both predictions on a macroeconomic bilateral dataset we find evidence in favour of the first model and an inverted-U relationship between aggregate remittances and the emigration ratio, with a maximum reached at a value of 0.5. Since many small "MIRAB" island nations are close to or even above this threshold value, this finding is of highly relevant for them since they may experience declining aggregate remittances as the diaspora grows further. |
| Keywords: | International migration,Remittances,Diaspora,Gravity model |
| Date: | 2018–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02133273&r=all |
| By: | Ariah Klages-Mundt; Andreea Minca |
| Abstract: | We develop a model of stable assets, including noncustodial stablecoins backed by cryptocurrencies. Such stablecoins are popular methods for bootstrapping price stability within public blockchain settings. We demonstrate fundamental results about dynamics and liquidity in stablecoin markets, demonstrate that these markets face deleveraging spirals that cause illiquidity during crises, and show that these stablecoins have `stable' and `unstable' domains. Starting from documented market behaviors, we explain actual stablecoin movements; further our results are robust to a wide range of potential behaviors. In simulations, we show that these systems are susceptible to high tail volatility and failure. Our model builds foundations for stablecoin design. Based on our results, we suggest design improvements that can improve long-term stability and suggest methods for solving pricing problems that arise in existing stablecoins. In addition to the direct risk of instability, our dynamics results suggest a profitable economic attack during extreme events that can induce volatility in the `stable' asset. This attack additionally suggests ways in which stablecoins can cause perverse incentives for miners, posing risks to blockchain consensus. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.02152&r=all |