nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2020‒08‒31
34 papers chosen by

  1. Towards a new index of mobile money inclusion and the role of the regulatory environment By Tetteh, Godsway Korku; Goedhuys, Micheline; Konte, Maty; Mohnen, Pierre
  2. Editorial: Understanding Cryptocurrencies By Wolfgang Karl H\"ardle; Campbell R. Harvey; Raphael C. G. Reule
  3. "Quick Response" Economic Stimulus: The Effect of Small-Value Digital Coupons on Spending By Jianwei Xing; Eric Zou; Zhentao Yin; Yong Wang
  4. The New Digital Platforms: Merger Control in Pakistan By Shahzada Aamir Mushtaq; Wang Yuhui
  5. Airbnb, Hotels, and Localized Competition By Maximilian Schäfer; Kevin Ducbao Tran
  6. CBDC: A systemic perspective By Bofinger, Peter; Haas, Thomas
  7. The Credit Card Act and Consumer Debt Structure By Yiwei Dou; Julapa Jagtiani; Ramain Quinn Maingi; Joshua Ronen
  8. Remittances, ICT and Pension Income Coverage: The International Evidence By David Adeabah; Simplice A. Asongu; Charles Andoh
  9. The interplay of financial education, financial literacy, financial inclusion and financial, stability: Any lessons for the current Big Tech era? By Nicole Jonker; Anneke Kosse
  10. Crowd, Lending, Machine, and Bias By Runshan Fu; Yan Huang; Param Vir Singh
  11. Misogynistic and Xenophobic Hate Language Online: A Matter of Anonymity By von Essen, Emma; Jansson, Joakim
  12. Banks, Money, and the Zero Lower Bound on Deposit Rates By Michael Kumhof; Xuan Wang
  13. Measuring the economic value of data and cross-border data flows: A business perspective By David Nguyen; Marta Paczos
  14. Australia; Financial Sector Assessment Program-Technical Note-Supervision, Oversight and Resolution Planning of Financial Market Infrastructures By International Monetary Fund
  15. Development and testing of methods of personal and professional diagnostics using digital technologies By Sinyagin, Yuriy (Синягин, Юрий); Mudarisov, Ainur (Мударисов, Айнур); Lytkina, Kseniya (Лыткина, Ксения)
  16. The online job market trace in Latin America and the Caribbean By Hilbert, Martin R.; Lu, Kangbo
  17. Peer-to-Peer Lending and Financial Inclusion with Altruistic Investors By Berentsen, Aleksander; Markheim, Marina
  18. Airbnb and Rents: Evidence from Berlin By Tomaso Duso; Claus Michelsen; Maximilian Schäfer; Kevin Ducbao Tran
  19. Early warnings of COVID-19 outbreaks across Europe from social media? By Milena Lopreite; Pietro Panzarasa; Michelangelo Puliga; Massimo Riccaboni
  20. Consumers’ Mobility, Expenditure and Online-Offline Substitution Response to COVID-19: Evidence from French Transaction Data By David Bounie; Youssouf Camara; John Galbraith
  21. Alternative Methods for Studying Consumer Payment Choice By Oz Shy
  22. How does Fintech Innovation Matter for Bank Fragility in SSA? By Nguena, Christian-Lambert
  23. An Update on Digital Currencies : a speech at the Federal Reserve Board and Federal Reserve Bank of San Francisco's Innovation Office Hours, San Francisco, California (via webcast), August 13, 2020. By Lael Brainard
  24. Los trabajadores de plataformas digitales en la República Dominicana: caracterización y opciones para su protección social By García, José Alexander; Javier, Katherine
  25. Análisis del sector informal y discusiones sobre la regulación del trabajo en plataformas digitales en el Ecuador By Arias Marín, Karla; Carrillo Maldonado, Paul; Torres Olmedo, Jeaneth
  26. Trustworthiness in the financial industry By Andrej Gill; Matthias Heinz; Heiner Schumacher; Matthias Sutter
  27. International Protection of Consumer Data By Yongmin Chen; Xinyu Hua; Keith E. Maskus
  28. Divided Information Space: Media Polarization on Twitter during 2019 Indonesian Election By Maulana, Ardian; Situngkir, Hokky
  29. Patterns in invoicing currency in global trade By Georgiadis, Georgios; Le Mezo, Helena; Mehl, Arnaud; Casas, Camila; Boz, Emine; Nguyen, Tra; Gopinath, Gita
  30. The Future of Retail Payments in the United States: a speech at the FedNow Service Webinar, Washington, D.C. (via webcast), August 06, 2020 By Lael Brainard
  31. A Weighted Travel Time Index Based on Data From E-Hailing Trips: An Application for São Paulo, Brazil By Schwambach Vieira, Renato; A. Haddad, Eduardo
  32. Explaining Support for COVID-19 Cell Phone Contact Tracing By Rheault, Ludovic; Musulan, Andreea
  33. Determinantes del dinero secundario en Bolivia: 2005-2017 By Julio Humérez Quiroz; Tatiana Rocabado Palomeque
  34. Management accounting and the idea of machine learning By Steen Nielsen

  1. By: Tetteh, Godsway Korku (Maastricht University, UNU-MERIT); Goedhuys, Micheline (Maastricht University, UNU-MERIT); Konte, Maty (Barnard College, Columbia University, and UNU-MERIT); Mohnen, Pierre (Maastricht University, UNU-MERIT)
    Abstract: It is an undeniable fact that financial inclusion has become a global policy priority. Despite its popularity in the policy sphere, the concept of financial inclusion lacks a comprehensive measure to monitor and evaluate inclusive financial systems across the globe. To fill this gap, we combine macro-level data from the Financial Access Survey of the International Monetary Fund and the World Bank’s Global Findex database to construct novel indices of financial inclusion. First, we compute new financial inclusion indices that incorporate access to financial services by groups prone to exclusion. Second, we account for the recent upsurge in mobile money adoption in the developing world by computing a novel mobile money inclusion index. We further relate the financial inclusion indices with legal origin to ascertain the role of initial conditions of the regulatory environment in countries’ financial inclusion achievements. We find that whereas developed countries continue to lead in banking inclusion, developing countries in sub-Saharan Africa are at the frontiers of mobile money inclusion. Also, we find evidence suggesting that the regulatory environment matters for financial inclusion.
    Keywords: Financial Inclusion, Banking Inclusion, Financial Innovation, Mobile Money Inclusion
    JEL: G21 O16 O35 O57
    Date: 2020–08–24
  2. By: Wolfgang Karl H\"ardle; Campbell R. Harvey; Raphael C. G. Reule
    Abstract: Cryptocurrency refers to a type of digital asset that uses distributed ledger, or blockchain, technology to enable a secure transaction. Although the technology is widely misunderstood, many central banks are considering launching their own national cryptocurrency. In contrast to most data in financial economics, detailed data on the history of every transaction in the cryptocurrency complex are freely available. Furthermore, empirically-oriented research is only now beginning, presenting an extraordinary research opportunity for academia. We provide some insights into the mechanics of cryptocurrencies, describing summary statistics and focusing on potential future research avenues in financial economics.
    Date: 2020–07
  3. By: Jianwei Xing; Eric Zou; Zhentao Yin; Yong Wang
    Abstract: We study a new consumption stimulus model that leverages mobile payment platforms to dispense massive amounts of small-value, use-it-this-week-or-lose-it digital coupons. We evaluate the effects of one such program in a large Chinese city using novel data of mobile platform transactions of 1 million program participants. Exploiting participants’ rush to the first-come, first-served digital portal, we compare spending among those who barely won coupons to those who barely lost because of minor differences in the timing of their arrival at the portal. We find that coupons generate an immediate increase in weekly consumption among winners by $3 additional out-of-pocket spending for every $1 in government subsidy – representing an order-of-magnitude improvement in fiscal cost-benefit relative to a traditional cash-based stimulus. Analysis of business customer flows suggests that coupons distort consumption toward more expensive options, leading the program to disproportionately favor big firms that sell pricier goods and services. Relaxing coupons’ minimum spending requirements would alleviate such distributional concern without sacrificing consumer welfare. We conclude that the coupon model can be a useful addition to policy makers’ stimulus toolbox.
    JEL: D12 E42 H30 O31
    Date: 2020–07
  4. By: Shahzada Aamir Mushtaq; Wang Yuhui
    Abstract: The Pakistan competition policy, as in many other countries, was originally designed to regulate business conduct in traditional markets and for tangible goods and services. However, the development and proliferation of the internet has led to the emergence of digital companies which have disrupted many sectors of the economy. These platforms provide digital infrastructure for a range of services including search engines, marketplaces, and social networking sites. The digital economy poses a myriad of challenges for competition authorities worldwide, especially with regard to digital mergers and acquisitions (M&As). While some jurisdictions such as the European Union and the United States have taken significant strides in regulating technological M&As, there is an increasing need for developing countries such as Pakistan to rethink their competition policy tools. This paper investigates whether merger reviews in the Pakistan digital market are informed by the same explanatory variables as in the traditional market, by performing an empirical comparative analysis of the Competition Commission of Pakistan's (CCP's) M&A decisions between 2014 and 2019. The findings indicate the CCP applies the same decision factors in reviewing both traditional and digital M&As. As such, this paper establishes a basis for igniting the policy and economic debate of regulating the digital platform industry in Pakistan.
    Date: 2020–06
  5. By: Maximilian Schäfer; Kevin Ducbao Tran
    Abstract: The rise of online platforms has disrupted numerous traditional industries. A prime example is the short-term accommodation platform Airbnb and how it affects the hotel industry. On the one hand, consumers can profit from Airbnb due to an increased number of choices and lower prices. On the other hand, critics of the platform argue that it allows professional hosts to operate de facto hotels while being subject to much laxer regulation. Understanding the nature of competition between Airbnb and hotels as well as quantifying consumer welfare gains from Airbnb is important to inform the debate on necessary platform regulation. In this paper, we analyze competition between hotels and Airbnb listings as well as the effect of Airbnb on consumer welfare. For this purpose, we use granular daily-level data from Paris for the year 2017. We estimate a nested logit model of demand that allows for consumer segmentation along accommodation types and the different districts within the city. We extend prior research by accounting for the localized nature of competition within districts of the city. Our results suggest that demand is segmented by district as well as accommodation type. Based on the parameter estimates, we calibrate a supply-side model to assess how Airbnb affects hotel revenues and consumer welfare. Our simulations imply that Airbnb increases average consumer surplus by 4.3 million euro per night and reduces average hotel revenues by 1.8 million euro. Furthermore, we find that 28 percent of Airbnb travelers would choose hotels if Airbnb did not exist.
    Keywords: Hotel industry, short-term rentals, localized competition, consumer welfare, sharing economy, peer-to-peer markets, Airbnb
    JEL: D4 D6 L1 Z38
    Date: 2020
  6. By: Bofinger, Peter; Haas, Thomas
    Abstract: In this study, we provide a systemic perspective on central bank digital currencies (CBDC). We separate existing proposals for CBDCs into the perspective of new payment objects, made available by central banks to a broader public, and new payment systems, operated by central banks. From a systemic perspective, CBDC proposals need to be examined to see how they would fit into the existing ecosystem of national, supra-regional, and international payment systems. To analyze the main implications of introducing CBDCs, we provide a price-theoretical banking model, which allows private non-banks to switch between holding bank deposits and CBDCs. In addition to the CBDC payment objects, we also present the option of a store-of-value CBDC. While most CBDC proposals incorporate new payment objects with new or existing payment systems, we discuss whether central banks could establish new payment systems without offering a new payment object.
    Keywords: central bank digital currency,central banks,payment systems
    JEL: E42 E52 E58 G21
    Date: 2020
  7. By: Yiwei Dou; Julapa Jagtiani; Ramain Quinn Maingi; Joshua Ronen
    Abstract: We investigate whether the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 influenced the debt structure of consumers. By debt structure, we mean the proportion of total available credit from credit cards for each consumer.The act enhances disclosures of contractual and related information and restricts card issuers’ ability to raise interest rates or charge late or over-limit fees, primarily affecting non-prime borrowers. Using the credit history via the Federal Reserve Bank of New York/Equifax Consumer Credit Panel during 2006–2016, we find that the average ratio of credit limit on cards to total consumer debt declined for non-prime borrowers in comparison to prime borrowers after the introduction of the CARD Act. The decline did not occur before the bill was first introduced in Congress; it took place afterward and continued through the end of our sample period. The results suggest that the CARD Act likely had an adverse effect on non-prime borrowers.
    Keywords: CARD Act; credit cards; credit limits; consumer debt
    JEL: G21 G28 G18 L21
    Date: 2020–08–05
  8. By: David Adeabah (University of Ghana, Legon, Ghana); Simplice A. Asongu (Yaoundé, Cameroon); Charles Andoh (University of Ghana, Legon, Ghana)
    Abstract: This study examines the impact of remittances and information and communication technology (ICT) on pension at the country level. Our empirical evidence, based on data from 96 countries, indicate a significant non-linearity between remittances, ICT and pension income coverage. First, we find a convex relation between remittances and pension income coverage, indicating that increases in remittance, initially decreases pension income coverage, but as remittance increases beyond a certain point, so too does pension income coverage. This inflection point, where the effect of remittances turns from negative to positive, is estimated to be around 3.09% of GDP. Second, we document a concave relationship between ICT (i.e. mobile subscription and internet penetration) and pension income coverage. An increase in ICT results in increased pension income coverage. However, when ICT reaches a certain point, any further increase is associated with lower pension income coverage. The estimated optimal point is found to be around 140.14 subscriptions (per 100 people) for mobile phone and 27.93 (per 100 people) for internet penetration, respectively. Other implications are discussed.
    Keywords: Pension income coverage; Remittances; Mobile subscription; Internet penetration; ICT
    Date: 2020–08
  9. By: Nicole Jonker; Anneke Kosse
    Abstract: The entry of Big Tech firms in the financial ecosystem might affect financial stability through the opportunities and challenges they create for financial inclusion. In this paper we survey the literature to determine the effectiveness of financial education in improving financial literacy and financial inclusion and to assess the impact of financial inclusion on financial stability. Based on our findings, we argue that new empirical research is needed to determine whether financial education can play a role in ensuring that everyone is able to reap the financial-inclusion benefits that Big Tech may bring. We also conclude that financial-inclusion opportunities created by Big Tech might potentially introduce risks for overall financial stability. Because of this, we underline the importance of proper supervision and regulation.
    Keywords: Big Tech; Fintech; Financial Services; Financial Education; Financial Literacy; Financial Inclusion; Financial Stability
    JEL: D14 D91 D92 G21 G23 O16
    Date: 2020–08
  10. By: Runshan Fu; Yan Huang; Param Vir Singh
    Abstract: Big data and machine learning (ML) algorithms are key drivers of many fintech innovations. While it may be obvious that replacing humans with machine would increase efficiency, it is not clear whether and where machines can make better decisions than humans. We answer this question in the context of crowd lending, where decisions are traditionally made by a crowd of investors. Using data from, we show that a reasonably sophisticated ML algorithm predicts listing default probability more accurately than crowd investors. The dominance of the machine over the crowd is more pronounced for highly risky listings. We then use the machine to make investment decisions, and find that the machine benefits not only the lenders but also the borrowers. When machine prediction is used to select loans, it leads to a higher rate of return for investors and more funding opportunities for borrowers with few alternative funding options. We also find suggestive evidence that the machine is biased in gender and race even when it does not use gender and race information as input. We propose a general and effective "debasing" method that can be applied to any prediction focused ML applications, and demonstrate its use in our context. We show that the debiased ML algorithm, which suffers from lower prediction accuracy, still leads to better investment decisions compared with the crowd. These results indicate that ML can help crowd lending platforms better fulfill the promise of providing access to financial resources to otherwise underserved individuals and ensure fairness in the allocation of these resources.
    Date: 2020–07
  11. By: von Essen, Emma (Swedish Institute for Social Research, Stockholm University); Jansson, Joakim (Department of Economics and Statistics, Linnaeus University)
    Abstract: In this paper, we quantify hateful content in online civic discussions of politics and estimate the causal link between hateful content and writer anonymity. To measure hate, we first develop a supervised machine-learning model that predicts hate against foreign residents and hate against women on a dominant Swedish Internet discussion forum. We find that an exogenous decrease in writer anonymity leads to less hate against foreign residents but an increase in hate against women. We conjecture that the mechanisms behind the changes comprise a combination of users decreasing the amount of their hateful writing and a substitution of hate against foreign residents for hate against women. The discussion of the results highlights the role of social repercussions in discouraging antisocial and criminal activities.
    Keywords: Online hate; Anonymity; Discussion forum; Machine learning; Big data
    JEL: C55 D00 D80 D90
    Date: 2020–08–14
  12. By: Michael Kumhof (Bank of England); Xuan Wang (Vrije Universiteit Amsterdam)
    Abstract: We develop a New Keynesian model where all payments between agents require bank deposits through deposits-in-advance constraints, bank deposits are created through disbursement of bank loans, and banks face a convex lending cost. At the zero lower bound on deposit rates (ZLBD), changes in policy rates affect activity through both real interest rates and banks’ net interest margins (NIM). At estimated credit supply elasticities, the Phillips curve is very flat at the ZLBD, because inflationary pressures increase NIM. This strongly increases credit and thereby output, but it dampens inflation by relaxing price setters’ credit rationing constraint. At the ZLBD, monetary policy has far larger effects on output relative to inflation, and Taylor rules stabilize output less effectively than rules that also respond to credit. For post-COVID-19 policy, this suggests urgency in returning inflation to targets, avoidance of negative policy rates, and a strong influence of credit conditions on rate setting.
    Keywords: Banks, money creation, inside money, money demand, deposits-in-advance, Phillips curve, zero lower bound, monetary policy rules, Taylor rules, post-COVID-19 reforms
    JEL: E41 E44 E51 G21
    Date: 2020–08–20
  13. By: David Nguyen (Economic Statistics Centre of Excellence); Marta Paczos (Economic Statistics Centre of Excellence)
    Abstract: The amount and variety of data that companies collect, aggregate and analyse has increased dramatically in recent years. This paper investigates how the economic value of data can be conceptualised and measured from a business perspective. It discusses data monetisation as a strategy for developing new business models or enhancing traditional ones, and proposes a new taxonomy for data that focuses on measuring its business value. The paper also discusses how different data characteristics and types affect economic value, before examining the role of cross-border data flows as a key enabler of our global economy. As part of this discussion, the concept of a "global data value chain" is presented, based on the idea that digitalisation enables the physical detachment of data collection, analysis, storage and monetisation. The paper concludes with a summary and discussion of the most promising avenues for measuring the economic value of data.
    Keywords: digital, science and technology
    Date: 2020–08–26
  14. By: International Monetary Fund
    Abstract: This paper analyzes systemic risks related to Financial Market Infrastructures (FMI) in Australia, in particular central counterparties (CCP). Supervision and oversight of FMIs is well-established with supervisory expectations importantly strengthened over the past few years. It is recommended that the Reserve Bank of Australia considers reviewing its approach to payment systems oversight, in particular by providing greater clarity as regards requirements for systemically and less systemically important payment systems. The IMF team suggests that Australian authorities could benefit from the experiences of and lessons learned by other jurisdictions through their regular and more specialized coordination and communication efforts with other supervisors and resolution authorities. The authorities should also review, and could benefit from, the experiences of and lessons learned in the formulation and codification of Australia’s bank and insurer resolution regime. Enforcement powers for the supervision of CCPs and Securities Settlement Systems should however be strengthened in accordance with the Principles for Financial Market Infrastructures.
    Keywords: Economic stabilization;Clearing and settlement systems;Central banks;Payment systems;Financial crises;ASX,RBA,RITS,payment system,ACCC
    Date: 2019–02–21
  15. By: Sinyagin, Yuriy (Синягин, Юрий) (The Russian Presidential Academy of National Economy and Public Administration); Mudarisov, Ainur (Мударисов, Айнур) (The Russian Presidential Academy of National Economy and Public Administration); Lytkina, Kseniya (Лыткина, Ксения) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The relevance of the study is determined by global trends in digitalization of a large number of fundamental processes in various fields of human activity, as well as the need to introduce modern technologies in the field of personal and professional diagnostics in order to implement a strategically competent and effective personnel policy. As part of the work, the world and domestic experience of the use of digital products and technologies in the selection and assessment of personnel, and other areas of psychological science, are analyzed. A key result of the work of the team of authors was the development and testing of new tools for diagnosing personal and professional qualities and managerial potential in the format of digital technologies for personal mobile devices. It has been proved that the active use of mobile digital technologies allows us to solve a number of fundamentally important tasks related to a significant reduction in the time required to complete the diagnostic and evaluation procedures, as well as the timing of processing the results, the competent distribution of available resources, the reduction of the negative impact of the human factor, and the increased availability and convenience of such procedures.
    Date: 2020–05
  16. By: Hilbert, Martin R.; Lu, Kangbo
    Abstract: Jobs intermediated by online platforms have become a central pillar of labour markets in Latin America and the Caribbean. Public online platforms inevitably leave digital trace data that can be used as a source of information regarding online labour supply and demand. This report explores the opportunities and challenges of the systematic use of these publicly available data. The objective is to give an overview of the volume and nature of these data, and to share the lessons learned in order to develop a research agenda that enables alternative labour market information tools to be created, based on these new sources. To provide an initial analysis of the type of information that can be drawn from this data source, this report presents the main findings from data collected from six major international labour market platforms and two global freelancing sites in late 2019 and early 2020. These platforms are Acciontrabajo (Profdir), CompuTrabajo, Jobisjob, CaribbeanJobsOnline, CaribbeanJobs, and the two global freelancing sites are Freelancer and Upwork, covering 33 countries in Latin America and the Caribbean.
    Date: 2020–08–07
  17. By: Berentsen, Aleksander; Markheim, Marina
    Abstract: Peer-to-peer lending platforms are increasingly important alternatives to traditional forms of credit intermediation for small value loans. There are high hopes that they improve financial inclusion and provide better terms for borrowers. To study these hopes, we introduce altruistic investors into a peer- to-peer model of credit intermediation. We find that altruistic investors do not improve financial inclusion but that the borrowing rates are lower than the ones obtained with self-interested investors. Furthermore, investors with strong altruistic preferences are willing to finance projects which generate an expected loss to them. For a certain range of parameters, the model's allocation is observationally equivalent to a model with self-interested investors with low bargaining power. Outside of this range, the model generates allocations that are not incentive feasible in a model with self-interested investors.
    Keywords: altruistic preferences, financial intermediation, financial inclusion, peer-to-peer platforms
    JEL: D11 D14 D2 D40 O1 O12 O16
    Date: 2020–08–04
  18. By: Tomaso Duso; Claus Michelsen; Maximilian Schäfer; Kevin Ducbao Tran
    Abstract: Cities worldwide have regulated peer-to-peer short-term rental platforms claiming that those platforms remove apartments from the long-term housing market, causing an in- crease in rents. Establishing and quantifying such a causal link is, however, challenging. We investigate two policy changes in Berlin to first assess how effective they were in regulating Airbnb, the largest online peer-to-peer short-term rental platform. We document that the policy changes reduced the number of entire homes listed on Airbnb substantially, by eight to ten listings per square kilometer. In particular the introduction of limitations on the misuse of regular rental apartments as short-term accommodations, also strongly reduced the average number of days per year that Airbnb listings are available for booking. In a second step, we then use this policy-induced change in Airbnb supply to assess the impact of Airbnb on rents in the city. Our results suggest that each nearby apartment on Airbnb increases average monthly rents by at least seven cents per square meter. This effect is larger for Airbnb listings that are available for rent for a larger part of the year. Further analyses suggest some effect heterogeneity across the city. In particular, areas with lower Airbnb density tend to be affected more by additional Airbnb listings.
    Keywords: Rents, housing market, short-term rental regulation, sharing economy, Airbnb
    JEL: R21 R31 R52 Z30
    Date: 2020
  19. By: Milena Lopreite; Pietro Panzarasa; Michelangelo Puliga; Massimo Riccaboni
    Abstract: We analyze social network data from Twitter to uncover early-warning signals of COVID-19 outbreaks in Europe in the winter season 2020, before the first public announcements of local sources of infection were made. We show evidence that unexpected levels of concerns about cases of pneumonia were raised across a number of European countries. Whistleblowing came primarily from the geographical regions that eventually turned out to be the key breeding grounds for infections. These findings point to the urgency of setting up an integrated digital surveillance system in which social media can help geo-localize chains of contagion that would otherwise proliferate almost completely undetected.
    Date: 2020–08
  20. By: David Bounie (CNRS, Telecom Paris, Institut Polytechnique de Paris); Youssouf Camara (CNRS, Telecom Paris, Institut Polytechnique de Paris); John Galbraith (McGill University, CIRANO and CIREQ)
    Abstract: This paper investigates a number of general phenomena connected with consumer behaviour in response to a severe economic shock, using billions of French card transactions measured before and during the COVID-19 epidemic. We examine changes in consumer mobility, anticipatory behaviour in response to announced restrictions, and the contrasts between the responses of online and traditional point-of-sale (offline) consumption expenditures to the shock. We track hourly, daily and weekly responses as well as estimating an aggregate fixed-period impact effect via a differencein-difference estimator. The results, particularly at the sectoral level, suggest that recourse to the online shopping option diminished somewhat the overall impact of the shock on consumption expenditure, thereby increasing resiliency of the economy.
    Keywords: COVID-19, consumption expenditure, consumer mobility, online commerce, resiliency, transaction data
    JEL: E21 E62 E61
    Date: 2020–05
  21. By: Oz Shy
    Abstract: Using machine learning techniques applied to consumer diary survey data, the author of this working paper examines methods for studying consumer payment choice. These techniques, especially when paired with regression analyses, provide useful information for understanding and predicting the payment choices consumers make.
    Keywords: studying consumer payment choice; point of sale; statistical learning; machine learning
    JEL: C19 E42
    Date: 2020–06–23
  22. By: Nguena, Christian-Lambert
    Abstract: There is a momentous debate on the role played by financial technology (fintech) innovation in the fragility of the banking sector. Considering the importance of financial solidness, contradictory theoretical predictions and empirical evidence, the in-depth re-investigation of this relation is needed. Using data of 690 banks across 34 Sub Saharan African countries for the period 1999-2015 along with FGLS, GMM, Panel Threshold regression and PCA econometric method, this paper empirically examines the influence of fintech innovation on bank fragility. Mainly the destabilizing impact of fintech innovation is confirmed for our baseline investigation but later relativized with a stabilizing impact after a certain threshold. Moreover, the results highlight also that the macroeconomic environment is important in explaining bank fragility and suggested that public policy should take into account some specific destabilizing consequences on the banking system. Besides, the simultaneous hypothesis test of the innovationfragility nexus conditional to some relevant variables reveals that financial openness does matter while investment, commercial openness and monetary policy do not. Lastly, the comparative analysis validates our heterogeneity hypothesis; countries with the high size banking sector, colonialized by France and members of monetary union performs better than the others in terms of bank solidness. These results indicate that suitable fintech innovation policy even between the same regions could be rather different. Financial instability appeared also to increase bank fragility. This paper contributes to the limited literature on fintech innovation at both the macro and micro levels in sub-Saharan Africa.
    Keywords: Fintech innovation,Bank fragility,Threshold regression,Technology transformation,FGLS,GMM,PCA
    JEL: G21 G28 G15 O31 O33
    Date: 2020
  23. By: Lael Brainard
    Date: 2020–08–13
  24. By: García, José Alexander; Javier, Katherine
    Abstract: Las plataformas de trabajo digitales han supuesto beneficios y desafíos para el mercado de trabajo a nivel global. Los trabajadores de plataformas presentan características que combinan las de empleados asalariados y de profesionales independientes, lo que dificulta su clasificación y la aplicación de medidas para su protección social. En este informe se analiza el estado de situación de los trabajadores de plataformas digitales en la República Dominicana, con miras a identificar sus necesidades de protección social, así como posibles respuestas de políticas. A través de una metodología de investigación mixta que se apoyó en una encuesta a 123 trabajadores y entrevistas en profundidad a empresas de plataformas, se estudió el perfil sociodemográfico de los trabajadores y sus condiciones de trabajo, así como la garantía de derechos y la satisfacción laboral. Los resultados del análisis sugieren la existencia de cierto grado de subordinación laboral en el caso de los trabajadores de plataformas de convocatoria local. Sin embargo, estos no cuentan con las salvaguardas contempladas para este tipo de relación, lo que pone en evidencia la necesidad de revisar los marcos normativos vigentes.
    Date: 2020–08–07
  25. By: Arias Marín, Karla; Carrillo Maldonado, Paul; Torres Olmedo, Jeaneth
    Abstract: La informalidad es un fenómeno que afecta a muchas familias ecuatorianas. En 2018, se estimaba que el 72,6% de los trabajadores tenía un empleo informal; es decir, no contaba con un contrato legal y no aportaba a la seguridad social. Esta situación conlleva graves consecuencias para los trabajadores y sus familias, para las empresas y para la sociedad en general, por lo que debe constituir una prioridad de política pública. En el presente documento, se sintetizan las definiciones de informalidad y se analiza en profundidad la evolución del empleo informal en el Ecuador entre 2007 y 2019, sobre la base de la Encuesta Nacional de Empleo, Desempleo y Subempleo. Asimismo, se realiza un análisis de la legislación vigente y de algunas políticas públicas aplicadas en los últimos años. Por otro lado, y dado el contexto de las nuevas tecnologías y el surgimiento de un número cada vez mayor de trabajadores informales de plataformas digitales, se presenta una revisión de las prácticas de regulación internacionales realizada con el fin de identificar medidas de posible aplicación en el país. Por último, se plantean recomendaciones de política pública orientadas a promover la formalización y el empleo de calidad en el Ecuador.
    Date: 2020–07–31
  26. By: Andrej Gill (University of Mainz); Matthias Heinz (University of Cologne, ECONtribute, Max Planck Institute for Research on Collective Goods, Bonn, and CEPR); Heiner Schumacher (KU Leuven, and University of Innsbruck); Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, ECONtribute, IZA Bonn, CESifo Munich and University of Innsbruck)
    Abstract: The financial industry has been struggling with widespread misconduct and public mistrust. Here we argue that the lack of trust into the financial industry may stem from the selection of subjects with little, if any, trustworthiness into the financial industry. We identify the social preferences of business and economics students, and follow up on their first job placements. We find that during college, students who want to start their career in the financial industry are substantially less trustworthy. Most importantly, actual job placements several years later confirm this association. The job market in the financial industry does not screen out less trustworthy subjects. If anything the opposite seems to be the case: Even among students who are highly motivated to work in finance after graduation, those who actually start their career in finance are significantly less trustworthy than those who work elsewhere.
    Keywords: Trustworthiness, Financial Industry, Selection, Social Preferences, Experiment
    JEL: C91 G20 M51
    Date: 2020–08
  27. By: Yongmin Chen; Xinyu Hua; Keith E. Maskus
    Abstract: We study the international protection of consumer data in a model where data usage benefits firms at the expense of their customers. We show that a multinational firm does not balance this trade-off efficiently if its data usage lacks (full) transparency or if consumers’ privacy preference differs across countries. Unilateral data regulation by each country addresses the moral-hazard problem associated with opacity, but may nevertheless reduce global welfare due to cross-country externalities that distort output and data usage. The regulations may also cause excessive investment in data localization, even though localization mitigates the externalities. Our findings highlight the need for international coordination. though not necessarily uniformity. on regulations about data usage and protection.
    Keywords: consumer data, data usage, privacy, multinational firm, regulation, data localization, international coordination
    JEL: L15 L86 F12
    Date: 2020
  28. By: Maulana, Ardian; Situngkir, Hokky
    Abstract: Nowadays, the understanding of the impact of social media and online news media on the emergence of extreme polarization in political discourse is one of the most pressing challenges for both science and society. In this study, we investigate the phenomenon of political polarization in the indonesian news media network based on the pattern of news consumption patterns of Twitter users during 2019 Indonesian elections. By modeling news consumption patterns as a bipartite network of news outletsTwitter user, and then projecting to a network of news outlets, we observed the emergence of a number of media communites based on audience similarity. By measuring the political alignments of each news outlet, we shows the politically fragmented Indonesian news media landscape, where each media community becomes an political echo chamber for its audience. Our finding highlight the important role of mainstream media as a bridge of information between political echo chamber in social media environment
    Keywords: network, news media network, echo-chamber, twitter, community detection, news consumption
    JEL: C00 C10 C12 C13 C15 C60 C63 C90 D80 D85
    Date: 2020–06
  29. By: Georgiadis, Georgios; Le Mezo, Helena; Mehl, Arnaud; Casas, Camila; Boz, Emine; Nguyen, Tra; Gopinath, Gita
    Abstract: This paper presents the most comprehensive and up-to-date panel data set of invoicing currencies in global trade. It provides data on the shares of exports and imports invoiced in US dollars, euros, and other currencies for more than 100 countries since 1990. The evidence from these data confirms findings from earlier research regarding the globally dominant role of the US dollar in invoicing – despite the comparatively smaller role of the US in global trade – and the overall stability of invoicing currency patterns. But the evidence also points to several novel stylised facts. First, both the US dollar and the euro have been increasingly used for invoicing even as the share of global trade accounted for by the US and the euro area has declined. Second, the euro is used as a vehicle currency in parts of Africa, and some European countries have seen significant shifts toward euro invoicing. And third, as suggested by the dominant currency paradigm, countries invoicing more in US dollars (euros) tend to experience greater US dollar (euro) exchange rate pass-through to their import prices; also, their trade volumes are more sensitive to fluctuations in these exchange rates. JEL Classification: F14, F31, F44
    Keywords: dominant currency paradigm, exchange rate pass-through, invoicing currency of trade
    Date: 2020–08
  30. By: Lael Brainard
    Date: 2020–08–06
  31. By: Schwambach Vieira, Renato (Universidade Católica de Brasília); A. Haddad, Eduardo (Departamento de Economia, Universidade de São Paulo)
    Abstract: In this paper, we combine data from Uber Movement and from a representative household travel survey to constructs a weighted travel time index for the Metropolitan Region of São Paulo. The index is calculated based on the average travel time of Uber trips taken between each pair of traffic zone and in each hour between January 1st, 2016 to December 31, 2018. The index is weighted based on the travel patterns reported in a representative household travel survey, thus the results reflect average congestion levels faced by individuals in the city. We show that the index has a strong correlation with traditional measures of congestion, however, it has a broader coverage of the road network. Finally, we run two analyses using the index: 1) we evaluate the trends of traffic congestion between 2016 and 2018, showing a significant decline in average time spent in traffic; 2) We analyze the effect of different events on traffic congestion in the city, including holidays, public transit strikes, road shutdowns, rain and Major sport events.
    Keywords: Traffic Congestion; Travel Time Index; E-Hailing Data
    JEL: C43 D62 R41
    Date: 2020–08–06
  32. By: Rheault, Ludovic (University of Toronto); Musulan, Andreea
    Abstract: COVID-19 contact tracing applications have been deployed at a fast pace around the world and may be a key policy instrument to contain future waves in Canada. This study aims to explain public opinion toward cell phone contact tracing using a survey experiment conducted with a representative sample of Canadian respondents. We build upon an established theory in evolutionary psychology—disease avoidance—to predict how media coverage of the pandemic affects public support for containment measures. We report three key findings. First, exposure to a news item that shows people ignoring social distancing rules causes an increase in support for cell phone contact tracing. Second, pre-treatment covariates such as anxiety and a belief that other people are not following the rules rank among the strongest predictors of support for COVID-19 apps. And third, while a majority of respondents approve the reliance on cell phone contact tracing, many of them hold ambivalent thoughts about the technology. Our analysis of answers to an open-ended question on the topic suggests that concerns for rights and freedoms remain a salient preoccupation.
    Date: 2020–07–06
  33. By: Julio Humérez Quiroz; Tatiana Rocabado Palomeque (Banco Central de Bolivia)
    Abstract: Un tema que no ha sido abordado suficientemente en la literatura es el referido a los factores que determinan la creación del dinero secundario. En este sentido, el presente documento trata de llenar este vacío y responder a la interrogante de ¿cuáles son los determinantes de la creación del dinero secundario en Bolivia? para lo cual se realizan estimaciones econométricas con información estadística mensual del periodo 2010 – 2017. Los resultados muestran que, en Bolivia, los factores que habrían promovido la creación de dinero secundario son: la solvencia del sistema financiero y la brecha del producto, principalmente; el desarrollo del sistema de pagos y la bolivianización; y los factores que muestran un efecto opuesto son la tasa de interés de depósitos en caja de ahorro, el spread de tasas de interés, la tasa interbancaria y la tasa de letras del TGN.
    Keywords: Oferta de dinero, multiplicador monetario
    JEL: E51
    Date: 2018–12
  34. By: Steen Nielsen (Department of Economics and Business Economics, Aarhus University)
    Abstract: Not only is the role of data changing in a most dramatic way, but also the way we can handle and use the data through a number of new technologies such as Machine Learning (ML) and Artificial Intelligence (AI). The changes, their speed and scale, as well as their impact on almost every aspect of daily life and, of course, on Management Accounting are almost unbelievable. The term ‘data’ in this context means business data in the broadest possible sense. ML teaches computers to do what comes naturally to humans and decision makers: that is to learn from experience. ML and AI for management accountants have only been sporadically discussed within the last 5-10 years, even though these concepts have been used for a long time now within other business fields such as logistics and finance. ML and AI are extensions of Business Analytics. This paper discusses how machine learning will provide new opportunities and implications for the management accountants in the future. First, it was found that many classical areas and topics within Management Accounting and Performance Management are natural candidates for ML and AI. The true value of the paper lies in making practitioners and researchers more aware of the possibilities of ML for Management Accounting, thereby making the management accountants a real value driver for the company.
    Keywords: Management accounting, machine learning, algorithms, decisions, analytics, management accountant, business translator, performance management
    JEL: C15 M41
    Date: 2020–08–06

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.