nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2019‒11‒04
seventeen papers chosen by

  1. Deep convolutional autoencoder for cryptocurrency market analysis By Vladimir Puzyrev
  2. Remittances, the Diffusion of Information and Industrialisation in Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  3. The Mobile Phone, Information Sharing and Financial Sector Development in Africa: A Quantile Regressions Approach By Simplice A. Asongu; Nicholas M. Odhiambo
  4. Are Equity Crowdfunding Investors Active Investors? By Lars Hornuf; Tobias Schilling; Armin Schwienbacher
  5. Stable Money and Central Bank Independence: Implementing Monetary Institutions in Postwar Germany By Carsten Hefeker
  6. Hello . . . Are You Still There? An Empirical Analysis How Market Structure Affects Quality of Mobile Networks By Wellmann, Nicolas
  7. Particularities of the Forensic Investigation of Software Piracy and Online Piracy By Adrian Cristian Moise
  8. Digital Forwarders - A Market Oriented Taxonomy By Elbert, R.; Gleser, M.
  9. Behind the headline number: Why not to rely on Frey and Osborne’s predictions of potential job loss from automation By Michael Coelli; Jeff Borland
  10. Keeping Real World Bias Out of Artificial Intelligence ?Examination of Coder Bias in Data Science Recruitment Solutions? By Yvette Burton
  11. The Contemporary Role of Gold in Central Banks' Balance Sheets By Iveta Polaskova; Lubos Komarek; Michal Skoda
  12. Advertising and Content Differentiation: Evidence from YouTube By Kerkhof, Anna
  13. Terrorism and social media: global evidence By Simplice A. Asongu; Stella-Maris I. Orim; Rexon T. Nting
  14. A New Economic Framework: A DSGE Model with Cryptocurrency By Stylianos Asimakopoulos; Marco Lorusso; Francesco Ravazzolo
  15. Bitcoin and Web Search Query Dynamics: Is the price driving the hype or is the hype driving the price? By Süssmuth, Bernd
  16. Michael Milken: The Junk Dealer By Ravi Kashyap
  17. Robots, Reshoring, and the Lot of Low-Skilled Workers By Krenz, Astrid; Strulik, Holger; Prettner, Klaus

  1. By: Vladimir Puzyrev
    Abstract: This study attempts to analyze patterns in cryptocurrency markets using a special type of deep neural networks, namely a convolutional autoencoder. The method extracts the dominant features of market behavior and classifies the 40 studied cryptocurrencies into several classes for twelve 6-month periods starting from 15th May 2013. Transitions from one class to another with time are related to the maturement of cryptocurrencies. In speculative cryptocurrency markets, these findings have potential implications for investment and trading strategies.
    Date: 2019–10
  2. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study examines the role of information and communication technology (ICT) on remittances for industrialisation in a panel of 49 African countries for the period 1980-2014. The empirical evidence is based on three simultaneity-robust estimation techniques, namely: (i) Instrumental Fixed Effects (FE) in order to control for the unobserved heterogeneity; (ii) Generalised Method of Moments (GMM) to account for persistence in industrialisation; and (iii) Instrumental Quantile Regressions (QR) to control for initial levels of industrialisation. Our best estimators are from FE and QR estimations because the GMM regression outputs largely fail post-estimation diagnostic tests. The following findings are established: (i) There are positive marginal effects from the interaction between remittances and ICT in the FE regressions whereas there are negative marginal impacts from the interaction between remittances and ICT; (ii) Interactions between remittances and mobile phone penetration are positive in the bottom and 90th quantiles whereas the interaction between internet penetration and remittances is positive in the bottom and top quantiles of the industrialisation distribution. Overall, the role of ICT in remittances for industrialisation is much more apparent when existing levels of industrialisation are accounted for. The findings contribute to the debates on the importance of external flows and information infrastructure in economic growth as well as the relevance of remittances in driving economic development in environments where institutions are weak. The value of the study to scholars and policy makers also builds on the fact that the potential for ICT and remittances in Africa can be leveraged to address development challenges on the continent such as the low level of industrialisation.
    Keywords: Remittances; Industrialisation; ICT; Africa
    JEL: F24 F43 F63 O30 O55
    Date: 2019–01
  3. 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
  4. By: Lars Hornuf; Tobias Schilling; Armin Schwienbacher
    Abstract: It is often assumed that entrepreneurs retain more control of their venture when they opt for equity crowdfunding as compared to venture capital, notably because crowd investors are passive. We study whether crowd investors are indeed passive by analysing the cash flow and control rights crowd investors receive in equity crowdfunding in Germany, where more flexible contracts are offered than in many other countries. We document that in Germany many of the rights used in venture capital investment contracts are also used in equity crowdfunding contracts. We find that crowd investors are asked to pay higher prices if they receive more cash flow and exit rights, consistent with the fact that these rights are valuable to the crowd. However, these rights have no meaningful economic impact, since they do not affect campaign outcome, the likelihood of securing follow-on funding, nor the likelihood of liquidation of the venture. These results are inconsistent with control rights theory that predicts positive impacts, in contrast to results documented for venture capital contracts. Rather, our results suggest that crowd investors are passive investors whose control rights are ineffective or not exercised.
    Keywords: crowdfunding, crowdinvesting, financial contracting, venture capital
    JEL: G34
    Date: 2019
  5. By: Carsten Hefeker
    Abstract: Germany prides itself in having one of the most successful central banks and currencies with respect to independence and stability. I show that not only were both imposed on the country after 1945 but that there was also initial resistance to both among German experts and officials. This is a rare case of the successful imposition of institutions from abroad. Events are discussed in light of Peter Bernholz’s requirements for stable money and a successful central bank.
    Keywords: currency reform, Bundesbank, central bank independence, institutional reform
    JEL: E42 E58 N14 N24
    Date: 2019
  6. By: Wellmann, Nicolas
    JEL: L96
    Date: 2019
  7. By: Adrian Cristian Moise (Spiru Haret University of Bucharest, Romania)
    Abstract: Starting from the analysis of the Law no 8/1996 on copyright and related rights in Romania, and continuing with the analysis of the main provisions of the European Union Directive 2001/29/EC on copyright and related rights in the information society and the European Union Directive 2009/24/EC on the legal protection of computer programs, the article presents and analyzes aspects of the criminal investigation of software piracy and online piracy. The article analyzes both some of the criminal investigation acts commonly used in software piracy such as technical-scientific findings and forensic expertise of copyrighted software or related rights, and some methodological issues related to forensic investigation of software piracy and online piracy.
    Keywords: copyrights, forensic investigation, online piracy, software piracy
    Date: 2019–08
  8. By: Elbert, R.; Gleser, M.
    Date: 2019–09
  9. By: Michael Coelli (Department of Economics, The University of Melbourne); Jeff Borland (Department of Economics, The University of Melbourne)
    Abstract: We review a highly influential study that estimated potential job loss from advances in Artificial Intelligence and robotics: Frey and Osborne (FO) (2013, 2017) concluded that 47 per cent of jobs in the United States were at ‘high risk’ of automation in the next 10 to 20 years. First, we investigate FO’s methodology for estimating job loss. Several major problems and limitations are revealed; especially associated with the subjective designation of occupations as fully automatable. Second, we examine whether FO’s predictions can explain occupation-level changes in employment in the United States from 2013 to 2018. Compared to standard approaches which classify jobs based on their intensity in routine tasks, FO’s predictions do not ‘add value’ for forecasting the impact of technology on employment.
    Keywords: employment; technology; prediction; job loss; AI and robotics
    JEL: J21 O33
    Date: 2019–10
  10. By: Yvette Burton (Columbia University School of Professional Studies)
    Abstract: Research Question and Objectives: Is there subtle gender bias in the way companies word and code job listings in such fields as engineering and programming? Although the Civil Rights Act effectively bans companies from explicitly requesting workers of a particular gender, the language in these listings may discourage many women from applying.The objectives of the research are to create to foundational constructs leaders can use to address the growing employee competency and business performance gaps created by the impact of lack of gender diversity among data scientist roles, and siloes across enterprise talent strategies. These two objectives include: Integrated Data Scientist and HCM Leadership Development Strategies and AI Leadership Assessment and Development w/ Risk Audits.
    Keywords: Coding Bias, Artificial Intelligence, Data Scientists, Leadership Development, Business Performance, Digital Workforce Solutions, Behavioral Analytics, Twenty-First Century Skills Gaps, Human Capital Management, STEM, Enterprise Risk Management.
    JEL: C89 D81 J24
    Date: 2019–07
  11. By: Iveta Polaskova; Lubos Komarek; Michal Skoda
    Abstract: This paper is devoted to the monetary policy context of gold in central banks' reserves. It examines the correlation between the nominal and real price of gold and selected macroeconomic variables and financial assets over the financial and business cycles. In this context, it analyses the investment diversification opportunity that gold offers central banks and other investors. The paper also highlights differences in gold holdings between the central banks of advanced economies (including those with reserve currencies) and those of emerging market and developing economies. It goes on to outline the history of gold holdings from the establishment of the independent Czechoslovakia at the end of 1918 to the present day. It concludes by presenting the rationale for the position of the CNB, which ranks among the modern central banks holding minimal amounts of reserve gold.
    Keywords: Central bank, gold, international monetary system, international reserves
    JEL: E42 E58 F33 Q31
    Date: 2019–10
  12. By: Kerkhof, Anna
    Abstract: Does advertising revenue increase or diminish content differentiation in media markets? This paper shows that an increase in the technically feasible number of ad breaks per video leads to an increase in content differentiation between several thousand YouTube channels. I exploit two institutional features of YouTube's monetization policy to identify the causal effect of advertising on the YouTubers' content choice. The analysis of around one million YouTube videos shows that advertising leads to a twenty percentage point reduction in the YouTubers' probability to duplicate popular content, i.e., content in high demand by the audience. I also provide evidence of the economic mechanism behind the result: popular content is covered by many competing YouTubers; hence, viewers who perceive advertising as a nuisance could easily switch to a competitor if a YouTuber increased her number of ad breaks per video. This is less likely, however, when the YouTuber differentiates her content from her competitors.
    Keywords: advertising,content differentiation,economics of digitization,horizontal product differentiation,long tail,media diversity,user-generated content,YouTube
    JEL: D22 L15 L82 L86
    Date: 2019
  13. By: Simplice A. Asongu (Yaoundé/Cameroon); Stella-Maris I. Orim (Coventry University, UK); Rexon T. Nting (London, UK)
    Abstract: The study assesses the relationship between terrorism and social media from a cross section of 148 countries with data for the year 2012. The empirical evidence is based on Ordinary Least Squares, Negative Binomial and Quantile regressions. The main finding is that there is a positive relationship between social media in terms of Facebook penetration and terrorism. The positive relationship is driven by below-median quantiles of terrorism. In other words, countries in which existing levels of terrorism are low are more significantly associated with a positive Facebook-terrorism nexus. The established positive relationship is confirmed from other externalities of terrorism: terrorism fatalities, terrorism incidents, terrorism injuries and terrorism-related property damages. The terrorism externalities are constituents of the composite dependent variable.
    Keywords: Social Media; Terrorism
    JEL: D83 O30 D74
    Date: 2019–01
  14. By: Stylianos Asimakopoulos; Marco Lorusso; Francesco Ravazzolo
    Abstract: This paper develops a Dynamic Stochastic General Equilibrium (DSGE) model to evaluate the economic repercussions of cryptocurrency. We assume that cryptocurrency offers an alternative currency option to government currency for households and we have an endogenous supply and demand for cryptocurrency. We estimate our model with Bayesian techniques using monthly data for the period 2013:M6-2019:M3. Our results indicate a substitution effect between the real balances of government currency and cryptocurrency in response to technology, preferences and monetary policy shocks. In addition, real balances of cryptocurrency exhibit a countercyclical reaction to these shocks. Moreover, we find that government currency demand shocks have larger effects on the economy than shocks to cryptocurrency demand. Our results also show that cryptocurrency productivity shocks have negative effects on output and on the exchange rate between government currency and cryptocurrency, with a more pronounced negative reaction to output if the central bank increases its weight to government currency growth. Overall, our results provide novel insights on the underlying mechanisms of cryptocurrency and spillover effects to the economy.
    Keywords: DSGE Model, Government Currency, Cryptocurrency, Bayesian Estimation
  15. By: Süssmuth, Bernd
    JEL: C32 E32 E42 G12 G15
    Date: 2019
  16. By: Ravi Kashyap
    Abstract: We take a closer look at the life and legacy of Micheal Milken. We discuss why Michael Milken, also know as the Junk Bond King, was not just any other King or run-of-the-mill Junk Dealer, but "The Junk Dealer". We find parallels between the three parts to any magic act and what Micheal Milken did, showing that his accomplishments were nothing short of a miracle. His compensation at that time captures to a certain extent the magnitude of the changes he brought about, the eco-system he created for businesses to flourish, the impact he had on the wider economy and also on the future growth and development of American Industry. We emphasize two of his contributions to the financial industry that have grown in importance over the years. One was the impetus given to the Private Equity industry and the use of LBOs. The second was the realization that thorough research was the key to success, financial and otherwise. Perhaps an unintended consequence of the growth in junk bonds and tailored financing was the growth of Silicon valley and technology powerhouses in the California bay area. Investors witnessed that there was a possibility for significant returns and that financial success could be had due to the risk mitigation that Milken demonstrated by investing in portfolios of so called high risk and low profile companies. We point out the current trend in many regions of the world, which is the birth of financial and technology firms and we suggest that finding innovative ways of financing could be the key to the sustained growth of these eco-systems.
    Date: 2019–10
  17. By: Krenz, Astrid; Strulik, Holger; Prettner, Klaus
    JEL: F13 F62 J31 O33
    Date: 2019

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