nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2020‒03‒23
eighteen papers chosen by

  1. Regulating Fintech: Objectives, Principles, and Practices By Amstad, Marlene
  2. Can mobile phone-based household surveys in rural Papua New Guinea generate information representative of the population surveyed? By Benson, Todd
  3. Cyber-Attacks and Cryptocurrencies By Guglielmo Maria Caporale; Woo-Young Kang; Fabio Spagnolo; Nicola Spagnolo
  4. Is Bitcoin Really Frictionless? By Asani Sarkar; Alexander Kroeger
  5. Jumps in Geopolitical Risk and the Cryptocurrency Market: The Singularity of Bitcoin By Elie Bouri; Rangan Gupta; Xuan Vinh Vo
  6. New evidence on platform workers in Europe: Results from the second COLLEEM survey By Maria Cesira Urzi Brancati; Annarosa Pesole; Enrique Férnandéz-Macías
  7. Digital technologies for financial inclusion of smallholder farmers: Needs assessment in three states of India By Ceballos, Francisco; Kannan, Samyuktha; Singh, Vartika; Kramer, Berber
  8. Mechanism Design with Blockchain Enforcement By Hitoshi Matsushima; Shunya Noda
  9. The use of Facebook and Twitter by DMOs in Europe By Antoniadis, Konstantinos; Grougiou, Vasiliki; Zafiropoulos, Kostas; Vrana, Vasiliki; Theocharidis, Anastasios Ioannis
  10. Payment vs. Funding: The Law of Reflux for Today By Perry Mehrling
  11. How Is Online Shopping Affecting Retail Employment? By Nicole Gorton; Jason Bram
  12. Discipline and Punish in the Digital Era : an analysis of GAFAM'S acquisition strategies By Maria Mercanti-Guérin; Christophe Bezes
  13. Factors Impacting Satisfaction with a Cooperatives Mobile and Web-based Information Platforms By Jayaramu, Niranjan; Lyford, Dr.Conrad
  14. Better than gold? A review of the Bitcoin Standard 2nd revision By Kristoffer Mousten Hansen
  15. The Future of Work: Challenges for Job Creation Due to Global Demographic Change and Automation By Abeliansky, Ana; Algur, Eda; Bloom, David E.; Prettner, Klaus
  16. AI Watch. Defining Artificial Intelligence. Towards an operational definition and taxonomy of artificial intelligence By Sofia Samoili; Montserrat Lopez Cobo; Emilia Gomez; Giuditta De Prato; Fernando Martinez-Plumed; Blagoj Delipetrev
  17. Did the Fed’s Term Auction Facility Work? By Asani Sarkar; James J. McAndrews; Zhenyu Wang
  18. Interest-Bearing Securities When Interest Rates are Below Zero By James J. McAndrews; Kenneth D. Garbade

  1. By: Amstad, Marlene (Asian Development Bank Institute)
    Abstract: We start by revisiting the true definition of money and identify that electronic money is not a new concept. We explain the spectrum of money in the context of the past, present, and future, and argue that technology can only enhance the way we deal with money and will never change the nature of money. The prospect of digital currency relies on innovation capacity, not only on central banks. We propose that a central bank is similar to a welfare society, and demand for digitalization has always been present due to problems such as nano units and coverage. We recommend tackling each digitization challenge sequentially and with a logical approach.
    Keywords: fintech; financial technology; digital currency
    JEL: F65 G15 O16
    Date: 2019–10–08
  2. By: Benson, Todd
    Abstract: Conducting household surveys through face-to-face interviewing in rural Papua New Guinea is beset with difficulties and high costs. With phone network coverage spreading across PNG, using mobile phones to obtain information from respondents can allow such surveys to be done more quickly and at significantly lower cost. However, not all rural households own mobile phones. In this Project Note, an assessment is made of whether survey information collected by calling respondents on their mobile phones will be representative of the population surveyed or, rather, might be subject to systematic biases. This assessment is done by analyzing the characteristics of households in four rural areas of PNG that were interviewed in a field survey in mid-2018.
    Keywords: PAPUA NEW GUINEA, OCEANIA, household surveys, rural areas, mobile equipment, mobile phones, assessment, data collection, population structure, technology, mobile phone connectivity, mobile phone ownership, science, technology, and innovation,
    Date: 2019
  3. By: Guglielmo Maria Caporale; Woo-Young Kang; Fabio Spagnolo; Nicola Spagnolo
    Abstract: This paper provides some comprehensive evidence on the effects of cyber-attacks on the returns, realized volatility and trading volume of five of the main cryptocurrencies (Bitcoin, Ethereum, Litecoin, XRP and Stellar) in 99 developed and developing countries. More specifically, it investigates the effects of four different types of cyber-attacks (cyber-crime, cyber-espionage, hacktivism and cyber-warfare) on four target sectors (government, industry, finance and cryptocurrency exchange). We find that in the US cyber security firms tend to overreact to cyberattacks affecting cryptocurrencies and more wealth is spent on cyber security compared to other countries. Both hacktivism and cyber-warfare have a significant impact on cryptocurrencies. Cryptocurrency exchanges are more vulnerable to cyber-attacks in non-US countries and in the presence of high economic uncertainty and less so if the industry sector is already being targeted. Finally, cryptocurrency investors exhibit risk-loving behaviour when the hash rate and cryptocurrency returns increase and risk-averse one when cyber-attacks target the financial and industry sectors and economic uncertainty is high.
    Keywords: cyber security, cyber-attacks, cryptocurrencies, return and volatility jumps
    JEL: C22 E40 G10
    Date: 2020
  4. By: Asani Sarkar; Alexander Kroeger
    Abstract: Bitcoin is the most popular virtual currency yet developed. Proponents assert that bitcoin can remove frictions involved in payment and settlement systems by eliminating the need for the financial intermediaries that exist in traditional currencies. In this blog post, we show that while bitcoin transfers themselves are relatively frictionless for the user, there are significant frictions when bitcoins trade in exchange markets resulting in meaningful and persistent price differences across bitcoin exchanges. These exchange-related frictions reduce the incentive of market participants to use bitcoin as a payments alternative.
    Keywords: bitcoin; financial frictions; arbitrage
    JEL: G1
  5. By: Elie Bouri (USEK Business School, Holy Spirit University of Kaslik, Jounieh, Lebanon); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, 0002, South Africa); Xuan Vinh Vo (University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam)
    Abstract: Are price discontinuities in cryptocurrencies jointly related to large swings in geopolitical risk? This is a relevant question to answer given recent news from the press that Bitcoin’s large price swings are driven by large swings in the level of geopolitical risk. We answer this question by examining first the jump incidence of daily returns for Bitcoin and other leading cryptocurrencies via the application of the approach of Laurent et al. (2016) and then by studying the co-jumps using logistic regressions. Preliminary results show that the price behaviour of all cryptocurrencies under study is jumpy. Further analyses show reasonable evidence to imply that co-jumps are significant for the case of Bitcoin only. This finding nicely complements previous studies arguing that Bitcoin is a hedge against geopolitical risk.
    Keywords: Geopolitical risk, Bitcoin, Cryptocurrencies, Jumps, GARCH
    Date: 2020–02
  6. By: Maria Cesira Urzi Brancati (European Commission - JRC); Annarosa Pesole (European Commission - JRC); Enrique Férnandéz-Macías (European Commission - JRC)
    Abstract: Digital labour platforms are a new form of coordinating the provision of labour services enabled by the latest technological revolution. Many authors claim that digital labour platforms have the potential to disrupt the world of work, both positively by boosting participation in the labour market through better matching procedures, and negatively by circumventing regulation and lowering the quality of employment. To assess the impact of digital labour platforms on employment and on working conditions, we need precise estimates of the number of people doing platform work; in addition we need information on what type of services they provide, how frequently these services are provided, how much money is earned as a result of this provision and so on. At the same time, when we talk about the impact of digital labour platforms on working conditions, it is imperative to understand whether platform work is just a side gig as it is often claimed, or whether it represents a major source of income and for whom. Thus, we need to ascertain the regularity, time allocated and income generated from platform work, as well as the employment status of platform workers, since this will provide information as to whether they have other forms of social protection from other jobs. In 2017, the JRC conducted the COLLEEM pilot survey, an initial attempt to provide quantitative evidence on platform work. This report builds on previous findings and contributes by describing the results of the second wave of COLLEEM (2018).
    Keywords: digital labour platforms; platform work; gig work; crowdwork; collaborative economy; sharing economy; atypical work.
    Date: 2020–02
  7. By: Ceballos, Francisco; Kannan, Samyuktha; Singh, Vartika; Kramer, Berber
    Abstract: Financial instruments such as savings, loans, and insurance are critical tools in managing risk for smallholder farmers across the developing world. Although smallholder farmers are disproportionately affected by adverse events, they are the least likely to have access to formal loans, insurance, or bank accounts, leaving them less prepared to manage weather and disaster risk. As the effects of climate change intensify, building resilience—the ability to mitigate, cope, and recover from shocks and stresses without compromising future welfare—is essential for reducing rural poverty and improving food and nutrition security.
    Keywords: INDIA, SOUTH ASIA, ASIA, digital technology, technology, smallholders, farmers, data, mobile phones, insurance, willingness to pay, Picture-Based Insurance (PBI), financial inclusion,
    Date: 2019
  8. By: Hitoshi Matsushima (Department of Economics, University of Tokyo); Shunya Noda (Vancouver School of Economics, University of British Columbia)
    Abstract: We study the design of self-enforcing mechanisms that rely on neither a trusted third party (e.g., court, trusted mechanism designer) nor a long-term relationship. Instead, we use a smart contract written on blockchains as a commitment device. We design the digital court, a smart contract that identifies and punishes agents who reneged on the agreement. The digital court substitutes the role of legal enforcement in the traditional mechanism design paradigm. We show that, any agreement that is implementable with legal enforcement can also be implemented with enforcement by the digital court. To pursue a desirable design of the digital court, we study a way to leverage truthful reports made by a small fraction of behavioral agents. Our digital court has a unique equilibrium as long as there is a positive fraction of behavioral agents, and it gives correct judgment in the equilibrium if honest agents are more likely to exist than dishonest agents. The platform for smart contracts is already ready in 2020; thus, self-enforcing mechanisms proposed in this paper can be used practically, even now. As our digital court can be used for implementing general agreements, it does not leak the detailed information about the agreement even if it is deployed on a public blockchain (e.g., Ethereum) as a smart contract.
    Keywords: Implementation, Decentralized Mechanism, Smart Contract, Oracle Problem, Self-Judgment
    JEL: D47 D82 L86
    Date: 2020–03
  9. By: Antoniadis, Konstantinos; Grougiou, Vasiliki; Zafiropoulos, Kostas; Vrana, Vasiliki; Theocharidis, Anastasios Ioannis
    Abstract: Social media promote destination image as they allow users to create and share travel-related information. This study based on Social Network Analytics and influence indicators, investigates the levels of adoption and information diffusion by Destination Management Organizations of European Countries in Facebook, and Twitter. It records the exact number of web 2.0 applications used by European countries DMO, and uses indicators of activity and influence on Facebook and Twitter. The study measures the level of information diffusion in relation to the electronic world of mouth dimension. A ranking of the countries on the basis of influence and activity is attempted.
    Keywords: social media, DMO, European countries, Facebook, Twitter, media influence
    JEL: L83 M31
    Date: 2018–10–28
  10. By: Perry Mehrling (Pardee School of Global Studies, Boston University)
    Abstract: The analytical tension in post-Keynesian thought between the theory of endogenous (credit) money and the theory of liquidity preference, brought to our attention by Dow and Dow (1989), can be viewed through the lens of the money view (Mehrling 2013) as a particular case of the balance between the elasticity of payment and the discipline of funding. Further, updating FullartonÕs 1844 Òlaw of refluxÓ for the modern condition of financial globalization and market based credit, the same money view lens offers a critical entry point into TobinÕs fateful 1963 intervention ÒCommercial Banks as Creators of ÔMoneyÕÓ which established post-war orthodoxy, and also to the challenge offered by so-called Modern Money Theory.
    Keywords: credit creation, financial intermediation, law of reflux
    JEL: B2 E5
    Date: 2020–01
  11. By: Nicole Gorton; Jason Bram
    Abstract: It?s been said that if you want to know how the economy is doing, look at how many people are carrying shopping bags. That adage may not hold so well today. The rise of the internet and e-commerce over the past two decades has chipped away at the market share of ?brick and mortar? retailers. But it?s only been in the past few years that this shift in market share has had a noteworthy effect on retail employment. In this post, we focus on national and local employment trends in two categories of retail?department stores and nonstore retailers?and try to assess how the surge in online shopping has affected local labor markets across the United States.
    Keywords: Online shopping retail employment county
    JEL: R1 J00
  12. By: Maria Mercanti-Guérin (IAE Paris - Sorbonne Business School, GREGOR - Groupe de Recherche en Gestion des Organisations - UP1 - Université Panthéon-Sorbonne - IAE Paris - Sorbonne Business School); Christophe Bezes (ISTEC - Institut supérieur des Sciences, Techniques et Economie Commerciales - ISTEC)
    Abstract: This study aims to produce a clearer understanding of how surveillance has changed in our digital world and to shed light on the transformation of bodies targeted by GAFAM. Accordingly, it draws the parallel between the current digital society and that described by Foucault, first at a theoretical level, then at an empirical level. Design/ methodology/ approach-. A panel of 80 companies were selected from among the 1000 or so bought or created by GAFAM (Google, Amazon, Facebook, Apple, Microsoft) described according to their professional activities and their areas of specialization. A semantic corpus then allowed us to categorize each type of monitoring following the five types of body surveillance identified by Foucault, namely the disciplined body, the digitized body, the documented body, the augmented body and the immortal body. Research limitations/implications-Although this study has its limitations-possible stretching of analogies in relation Foucault's theoretical work, the limited number of acquisitions studied-, it has the merit of making links between surveillance, data and the body. Findings-Originality/value-This study shows that GAFAM's acquisition strategies are unquestionably body-centric and can be predicted. The body-centric strategies of each of the big five companies studied show very clear differences which are indicative of their distinctive positioning and discourses.
    Keywords: Body-centrism,GAFAM,Surveillance,Foucault,Acquisition strategy,Data Acquisition
    Date: 2019–06–11
  13. By: Jayaramu, Niranjan; Lyford, Dr.Conrad
    Keywords: Agribusiness, Farm Management
  14. By: Kristoffer Mousten Hansen (GRANEM - Groupe de Recherche Angevin en Economie et Management - Institut National de l'Horticulture et du Paysage - AGROCAMPUS OUEST - UA - Université d'Angers)
    Date: 2020
  15. By: Abeliansky, Ana (University of Göttingen); Algur, Eda (Harvard School of Public Health); Bloom, David E. (Harvard University); Prettner, Klaus (University of Hohenheim)
    Abstract: We explore future job creation needs under conditions of demographic, economic, and technological change. First, we estimate the implications for job creation in 2020–2030 of population growth, changes in labor force participation, and the achievement of plausible target unemployment rates, disaggregated by age and gender. Second, we analyze the job creation needs differentiated by country income group. Finally, we examine how accelerated automation could affect job creation needs over the coming decades. Overall, shifting demographics, changing labor force participation rates, reductions in unemployment to the target levels of 8 percent for youth and 4 percent for adults, and automation combine to require the creation of approximately 340 million jobs in 2020–2030.
    Keywords: demography, labor, unemployment
    JEL: J11 J21 J68 O30
    Date: 2020–02
  16. By: Sofia Samoili (European Commission - JRC); Montserrat Lopez Cobo (European Commission - JRC); Emilia Gomez (European Commission - JRC); Giuditta De Prato (European Commission - JRC); Fernando Martinez-Plumed (Universitat Politecnica de Valencia); Blagoj Delipetrev (European Commission - JRC)
    Abstract: This report proposes an operational definition of artificial intelligence to be adopted in the context of AI Watch, the Commission knowledge service to monitor the development, uptake and impact of artificial intelligence for Europe. The definition, which will be used as a basis for the AI Watch monitoring activity, is established by means of a flexible scientific methodology that allows regular revision. The operational definition is constituted by a concise taxonomy and a list of keywords that characterise the core domains of the AI research field, and transversal topics such as applications of the former or ethical and philosophical considerations, in line with the wider monitoring objective of AI Watch. The AI taxonomy is designed to inform the AI landscape analysis and will expectedly detect AI applications in neighbour technological domains such as robotics (in a broader sense), neuroscience or internet of things. The starting point to develop the operational definition is the definition of AI adopted by the High Level Expert Group on artificial intelligence. To derive this operational definition we have followed a mixed methodology. On one hand, we apply natural language processing methods to a large set of AI literature. On the other hand, we carry out a qualitative analysis on 55 key documents including artificial intelligence definitions from three complementary perspectives: policy, research and industry. A valuable contribution of this work is the collection of definitions developed between 1955 and 2019, and the summarisation of the main features of the concept of artificial intelligence as reflected in the relevant literature.
    Keywords: artificial intelligence, ai watch, ai definition, ai taxonomy, ai keywords, industry, market, research
    Date: 2020–02
  17. By: Asani Sarkar; James J. McAndrews; Zhenyu Wang
    Abstract: The Federal Reserve introduced the Term Auction Facility (TAF) in December 2007 to provide term loans to banks during the recent financial crisis. In this post, we report on the effectiveness of the TAF during the early stages of the crisis. We find that the TAF was associated with a decrease in the ?liquidity premium,? one component of a bank's borrowing cost. In other words, the TAF worked as intended.
    Keywords: crisis; Federal Reserve; money market; term funding.; Libor; Term Auction Facility
    JEL: G2 G1
  18. By: James J. McAndrews; Kenneth D. Garbade (Federal Reserve Bank; Bankers Trust Company)
    Abstract: Negative interest rates have evolved, over the past few years, from a topic of modest academic interest to a practical reality. Short- and intermediate-term sovereign debt of several European countries, including Germany, Denmark, the Netherlands, Sweden, Austria, and Switzerland, now trades at negative yields.
    Keywords: Equation; Research; Garbade; Math
    JEL: E5 G2

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