nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2021‒01‒04
28 papers chosen by
Bernardo Bátiz-Lazo
Northumbria University

  1. Stablecoins: potential, risks and regulation By Douglas Arner; Raphael Auer; Jon Frost
  2. Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in the United States and Canada By ; ; Fumiko Hayashi; Joanna Stavins
  3. Privacy and antitrust in digital platforms By Nicholas Economides; Ioannis Lianos
  4. e. The use of blockchain technology to improve the food supply chain By Marecki, Krzysztof; Wójcik-Czerniawska, Agnieszka
  5. Humanistic Digital Governance By Dennis J. Snower; Paul Twomey
  6. Losing Contact: The Impact of Contactless Payments on Cash Usage By Marie-Hélène Felt
  7. A game changer in payment habits: evidence from daily data during a pandemic By Guerino Ardizzi; Andrea Nobili; Giorgia Rocco
  8. Norway; Financial Sector Assessment Program-Technical Note-Cybersecurity Risk Supervision and Oversight By International Monetary Fund
  9. On the Effects of the Availability of Means of Payments: The Case of Uber By Fernando E. Alvarez; David O. Argente
  10. Data, Targeted Advertising and Quality of Journalism: The Case of Accelerated Mobile Page (AMP) By Jeon, Doh-Shin; Yan, Jun
  11. Auf die Verbraucher kommt es an: Ökonomische Überlegungen zur Regulierung digitaler Plattformen By Thomas, Tobias; Koch, Philipp; Schwarzbauer, Wolfgang
  12. Monetary Policy with Reserves and CBDC: Optimality, Equivalence, and Politics By Dirk Niepelt
  13. Information Technology and Gender Economic Inclusion in Sub-Saharan Africa By Simplice A. Asongu; Joseph Amankwah†Amoah; Rexon T. Nting; Godfred A. Afrifa
  14. Digital Money as a Unit of Account and Monetary Policy in Open Economies By Daisuke Ikeda
  15. The Digital Revolution: Lights and Shadows (Lecture Delivered at Foundation Ramon Areces) By Robert Serrano
  16. The New Cybersecurity Landscape – How Are Finnish Companies Faring? By Mattila, Juri; Ali-Yrkkö, Jyrki; Seppälä, Timo
  17. (In)Efficiencies of current financial market infrastructures - a call for DLT? By Basil Guggenheim; Sébastien P. Kraenzlin; Christoph Meyer
  18. Consumer Surplus of Alternative Payment Methods: Paying Uber with Cash By Fernando E. Alvarez; David O. Argente
  19. The failure of Chinese peer-to-peer lending platforms : Finance and politics By He, Qing; Li, Xiaoyang
  20. Robust Regression Discontinuity Estimates Of The Causal Effect Of The Tripadvisor’s Bubble Rating On Hotel Popularity By Elena Pokryshevskaya; Evgeny Antipov
  21. The Diffusion of Technological Progress in ICT By Steffen Elstner; Christian Grimme; Valentin Kecht; Robert Lehmann
  22. Kingdom of Lesotho; Requests for Disbursement Under the Rapid Credit Facility and Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for the Kingdom of Lesotho By International Monetary Fund
  23. The Distributional Impact of the Pandemic By Hacıoglu Sinem; Diego Känzig; Paolo Surico
  24. Haiti; Selected Issues By International Monetary Fund
  25. Towards Safer and More Productive Migration for South Asia By World Bank
  26. COVID-19 Crisis Through a Migration Lens By World Bank
  27. Senegal; First Review Under the Policy Coordination Instrument and Request for Modification of Quantitative Targets-Press Release; Staff Report; and Statement by the Executive Director for Senegal By International Monetary Fund
  28. Remittance Inflow and Unemployment in Nigeria By Godfrey I. Ihedimma; Godstime I. Opara

  1. By: Douglas Arner; Raphael Auer; Jon Frost
    Abstract: The technologies underlying money and payment systems are evolving rapidly. Both the emergence of distributed ledger technology (DLT) and rapid advances in traditional centralised systems are moving the technological horizon of money and payments. These trends are embodied in private "stablecoins": cryptocurrencies with values tied to fiat currencies or other assets. Stablecoins - in particular potential "global stablecoins" such as Facebook's Libra proposal - pose a range of challenges from the standpoint of financial authorities around the world. At the same time, regulatory responses to global stablecoins should take into account the potential of other stablecoin uses, such as embedding a robust monetary instrument into digital environments, especially in the context of decentralised systems. Looking forward, in such cases, one possible option from a regulatory standpoint is to embed supervisory requirements into stablecoin systems themselves, allowing for "embedded supervision". Yet it is an open question whether central bank digital currencies (CBDCs) and other initiatives could in fact provide more effective solutions to fulfil the functions that stablecoins are meant to address.
    Keywords: stablecoins, cryptocurrencies, crypto-assets, blockchain, distributed ledger technology, central bank digital currencies, fintech, central banks, regulation, supervision, money
    JEL: E42 E51 E58 F31 G28 L50 O32
    Date: 2020–11
  2. By: ; ; Fumiko Hayashi; Joanna Stavins
    Abstract: Using data from the United States and Canada, we quantify consumers’ net pecuniary cost of using cash, credit cards, and debit cards for purchases across income cohorts. The net cost includes fees paid to financial institutions, rewards received from credit or debit card issuers, and the merchant cost of accepting payments that is passed on to consumers as higher retail prices. Even though credit cards are more expensive for merchants to accept compared with other payment methods, merchants typically do not differentiate prices at checkout, but instead pass through their costs to all consumers. As a result, credit card transactions are cross-subsidized by cheaper debit and cash payments. Card rewards and consumer fees paid to financial institutions are additional sources of cross-subsidies. We find that consumers in the lowest-income cohort pay the highest net pecuniary cost as a percentage of transaction value, while consumers in the highest-income cohort pay the lowest. This result is robust under various scenarios and assumptions, suggesting payment card pricing and merchant cost pass-through have regressive distributional effects in the United States and Canada.
    Keywords: regressive effects; rewards; credit cards; interchange fees; pass-through
    JEL: D12 D31 G21 L81
    Date: 2020–12–01
  3. By: Nicholas Economides (Professor of Economics, NYU Stern School of Business, New York, New York 10012); Ioannis Lianos (President, Hellenic Competition Commission and Professor of Global Competition Law and Public Policy, Faculty of Laws, University College London)
    Abstract: Dominant digital platforms such as Google and Facebook collect personal information of users by default precipitating a market failure in the market for personal information. We establish the economic harms from the market failure. We discuss conditions for eliminating the market failure and various remedies to restore competition.
    Keywords: personal information; Internet search; Google; Facebook; digital; privacy; restrictions of competition; exploitation; market failure; data dominance; abuse of a dominant position; unfair commercial practices; excessive data extraction; self-determination; behavioral manipulation; remedies; portability; opt-out.
    JEL: K21 L1 L12 L4 L41 L5 L86 L88
    Date: 2021–01
  4. By: Marecki, Krzysztof; Wójcik-Czerniawska, Agnieszka
    Abstract: The purpose of the article is to show how to use relatively new and very innovative Blockchain technology to improve the food supply chain. In countries such as the United States or Thailand is starting to be an indispensable element in the agri-food sector. At the outset, it should be said what the Blockchain technology is, the use of which is becoming very broad in many sectors of the economy, including in the area of monetary policy of the state. It is used when creating virtual money, i.e. cryptocurrencies, which, despite the controversy they arouse, as well as the world of virtual finance in the COVID-19 era, begin to play a significant role. Blockchain (BCT) in the case of the food supply chain, despite the fact that it is a relatively new digital technology, may revolutionize its functioning. This technology is designed to provide the possibility of storing information in a database of transactions and products, which is decentralized and distributed and not susceptible to changes and manipulations. BCT believes it can play a positive role in ensuring food safety and quality. The main benefit of using this technology is the increased transparency of food supply chains. BCT makes it possible to increase the efficiency of tracking systems and identification of agri-food products in the supply chain. This means that thanks to BTC, it is possible to reduce the number of cases of food adulteration and the unauthorized use of food quality certificates. Nevertheless, BCT, due to the fact that it is a new technology, is not fully developed, i.e. the possibility of scaling BCT may turn out to be ineffective in more extensive and complex supply chains including multi-component products. In addition, it should be remembered that this technology is associated with barriers of a social, economic, legal and financial nature, which may adversely affect the further use of BCT in food supply chains. Despite the growing interest of agri-food sector enterprises in using BCT, its implementation in food supply chains may progress slowly.
    Keywords: Agribusiness, Crop Production/Industries, Food Consumption/Nutrition/Food Safety, Research and Development/Tech Change/Emerging Technologies
    Date: 2020–09–25
  5. By: Dennis J. Snower; Paul Twomey
    Abstract: We identify an important feature of current digital governance systems: “third-party funded digital barter”: consumers of digital services get many digital services for free (or underpriced) and in return have personal information about themselves collected for free. In addition, the digital consumers receive advertising and other forms of influence from the third parties that fund the digital services. The interests of the third-party funders are not well-aligned with the interests of the digital consumers. This fundamental flaw of current digital governance systems is responsible for an array of serious problems, including inequities, inefficiencies, manipulation of digital consumers, as well as dangers to social cohesion and democracy. We present four policy guidelines that aim to correct this flaw by shifting control of personal data from the data aggregators and their third-party funders to the digital consumers. The proposals cover “official data” that require official authentication, “privy data” that is either generated by the data subjects about themselves or by a second parties, and “collective data.” The proposals put each of these data types under the individual or collective control of the data subjects. There are also proposals to mitigate asymmetries of information and market power.
    Keywords: digital governance, digital services, personal data, digital service providers, market power, advertising, preference manipulation
    Date: 2020
  6. By: Marie-Hélène Felt
    Abstract: I investigate the impact of contactless credit cards (CTCs) on cash use in Canada, using panel data between 2010 and 2017. I show that ignoring unobserved heterogeneity would lead to overstating the impact of CTCs on cash usage in a linear model. Using finite mixture modelling, I provide evidence of the differential impacts of CTCs on the extensive versus intensive margins of cash usage. I use a two-part model, with an exclusion restriction for better identification, to model both margins separately. I obtain that CTC use negatively influences the intensive margin of cash usage but not its extensive margin. There is no clear evidence of an S-curve pattern in the impact of CTCs on cash usage over the sample period.
    Keywords: Bank notes; Digital currencies and fintech; Econometric and statistical methods; Financial services
    JEL: C33 D12 E41
    Date: 2020–12
  7. By: Guerino Ardizzi (Bank of Italy); Andrea Nobili (Bank of Italy); Giorgia Rocco (Bank of Italy)
    Abstract: We explore the relationship between cash and other payment instruments using the outbreak of the COVID-19 pandemic as a natural experiment exogenously affecting both the payment industry and consumers’ habits. We rely on Google search data, as well as on the official series of new cases of infection to measure the intensity of the pandemic, and apply local projection methods to assess the effects on payment habits. We find a large and persistent substitution effect from cash to card-based transactions, especially using contactless and e-commerce options. The fear of infection has led to a new implicit cost associated to each payment instrument, thus affecting payment choices from the demand-side and boosting consumption with non-cash transactions. Moreover, technical constraints on the cash cycle and the lockdown measures have increased the demand for cash for precautionary purposes. Policies aiming at accelerating the digital economy and the most innovative means of payment can potentially make economic activity more resilient to adverse shocks. At the same time, ensuring the adequate and efficient availability of cash remains essential from a social and economic perspective.
    Keywords: COVID-19 pandemic, cash, payment habits, unconventional data
    JEL: E41 E42 G2 O3
    Date: 2020–12
  8. By: International Monetary Fund
    Abstract: The Norwegian financial system has a long history of incorporating new technology. Norway is at the forefront of digitization and has tight interdependencies within its financial system, making it particularly vulnerable to evolving cyber threats. Norway is increasingly a cashless society, with surveys and data collection suggesting that only 10 percent of point-of-sale and person-to-person transactions in 2019 were made using cash.1 Most payments made in Norway are digital (e.g., 475 card transactions per capita per annum)2 and there is an increase in new market entrants providing a broad range of services. Thus, good cybersecurity is a prerequisite for financial stability in Norway.
    Keywords: Cyber risk;Banking;Financial sector;Financial stability assessment;PFM information systems;ISCR,CR,cybersecurity incident,cybersecurity risk,incident report,NSM cybersecurity principle,FSA plan,incident information,information sharing
    Date: 2020–08–12
  9. By: Fernando E. Alvarez; David O. Argente
    Abstract: We use three quasi-natural experiments in Mexico and one in Panama to estimate the effects of having the option to pay with cash on Uber rides. The ability to pay in cash affects the demand for rides, which is reflected in large changes in the total number of trips, fares, miles, and number of users after Uber introduced cash payments, particularly in lower-income city blocks. On the other hand, the effects on prices, estimated times of arrival, and competitor pricing are negligible, consistent with the supply of trips being very elastic. Although cash payments naturally increase the fraction of users that pay exclusively with cash, more than half of the users have access to both cards and cash, and alternate between payment methods. We find evidence consistent with cash and card payments being imperfectly substitutable at both the intensive and extensive margins, which magnifies the impact of policies that restrict the availability of payment methods.
    JEL: E41
    Date: 2020–11
  10. By: Jeon, Doh-Shin; Yan, Jun
    Abstract: This paper studies how newspapers’ adoption of Google’s Accelerated Mobile Page (AMP), a publishing format for mobile devices enabling instant loading of web pages, changes data allocation and thereby newspapers’ incentive to invest in quality of journalism when consumer data is used for targeted advertising. The adoption of AMP allows Google to obtain consumer data from AMP articles and to combine it with other sources of consumer data to improve targeting of the advertisements served by Google on other websites. Even if such data combination increases static efficiency, it can reduce dynamic efficiency when it lowers the ad revenue per newspaper traffic and thereby reduces the quality of journalism. Newspapers face a collective action problem as a newspaper’s adoption of AMP generates negative externalities to other newspapers through data leakage. In addition to leveraging its search monopoly power, Google can use a divide-and-conquer strategy to induce newspapers to adopt AMP. We provide policy remedies.
    Keywords: Targeted Advertising; Data Combination; Data Leakage; Quality; of Journalism; Search Engine
    JEL: D21 L12 L15 L82 M37
    Date: 2020–12–14
  11. By: Thomas, Tobias; Koch, Philipp; Schwarzbauer, Wolfgang
    Abstract: Digitale Plattformen nehmen als Vermittler von wirtschaftlichen Transaktionen eine immer bedeutendere Rolle ein. Neben Suchmaschinen wie Bin9 oder Goo9/e können auch soziale Netzwerke wie Facebook oder Twitter, Handelsplattformen wie Amazon oder eBay, Unterhaltungsplattformen wie Spotify oder Vergleichsportale wie Skyscanner oder Triva90 als digitale Plattformen verstanden werden. Insbesondere Plattformen der Sharing Economy; die zwischen Privatpersonen vermitteln, wachsen in den letzten Jahren rasant. Aufgrund der schnelllebigen Entwicklung und der damit wachsenden Herausforderung für bestehende Geschäftsmodelle, wird in der öffentlichen Debatte insbesondere die Regulierung digitaler Plattformen immer wieder kontrovers diskutiert. Am aktuellen Rand stehen hierbei in Österreich Airbnb und Uber im Fokus. Dabei stiften Online-Plattformen vielseitigen Nutzen: Zum einen verringern sie sowohl für Anbieter als auch Nachfrager die Such- und Tauschkosten und erhöhen die Transparenz am Markt. Zum anderen werden teils ungenutzte Ressourcen durch ein effizienteres Matching zwischen Anbietern und Nachfragern zur Verwendung gebracht. Damit erhöhen digitale Geschäftsmodelle die Wahlmöglichkeiten für Verbraucher, senken tendenziell die Preise bei gleicher oder besserer Qualität, erhöhen die abgesetzte Menge an Produkten und steigern somit das Einkommen und den Wohlstand einer Volkswirtschaft. Gleichzeitig treten neue Geschäftsmodelle allerdings auch in Konkurrenz zu traditionellen Unternehmen, was nicht selten den Ruf nach Regulierung auslöst. Um die Wohlstandsgewinne der Digitalisierung zu realisieren, sollte der Staat für einen fairen Wettbewerb mit gleichen Startbedingungen sowohl für traditionelle als auch neue Geschäftsmodelle sorgen. Um die Wahlmöglichkeiten der Konsumentinnen nicht unnötig einzuschränken, sollte dabei gerade in Zeiten technischen Fortschritts und Digitalisierung immer wieder überprüft werden, welche bestehenden Regularien noch notwendig sind und welche gelockert werden können. So könnte in der Ausbildung zum Taxifahrer zum Beispiel auf die Prüfung detaillierter Kenntnisse des Straßennetzes verzichtet und stattdessen die Kompetenz im Umgang mit Navigationssystemen abgeprüft werden. Auch verhindert in diesem Bereich die jüngst beschlossene Ausweitung der direkten Preisregulierung auf Mietwagen günstigere Preise für die Fahrgäste und eine bessere Auslastung. Grundsätzlich erscheint eine unreflektierte Ausdehnung bestehender Regularien auf neue Geschäftsmodelle ebenso wenig sinnvoll wie eine vollständige Liberalisierung ohne dabei relevante Aspekte z.B. der Sicherheit oder des Verbraucherschutzes zu berücksichtigen. Als Maxime zielführender Regulierung sollte keine bestimmte Gruppe von Unternehmen - nicht die traditionellen, aber auch nicht die neuen, digitalen - von der Politik vorzugsweise geschützt, sondern die wettbewerblichen Rahmenbedingungen im Sinne der Verbraucher und des Wohlstands der gesamten Volkswirtschaft ausgestaltet werden.
    Date: 2019
  12. By: Dirk Niepelt
    Abstract: We analyze policy in a two-tiered monetary system. Noncompetitive banks issue deposits while the central bank issues reserves and a retail CBDC. Monies differ with respect to operating costs and liquidity. We map the framework into a baseline business cycle model with “pseudo wedges” and derive optimal policy rules: Spreads satisfy modified Friedman rules and deposits must be taxed or subsidized. We generalize the Brunnermeier and Niepelt (2019) result on the macro irrelevance of CBDC but show that a deposit based payment system requires higher taxes. The model implies annual implicit subsidies to U.S. banks of up to 0:8 percent of GDP during the period 1999-2017.
    Keywords: reserves, deposits, central bank digital currency, monetary policy, Friedman rule, equivalence, Ramsey policy, bank profits, money creation
    JEL: E42 E43 E51 E52
    Date: 2020
  13. By: Simplice A. Asongu (Yaounde, Cameroon); Joseph Amankwah†Amoah (University of Kent, Kent, UK); Rexon T. Nting (University of Wales, London, UK); Godfred A. Afrifa (University of Kent, Kent, UK)
    Abstract: This study investigates how ICT affects gender economic inclusion via gender parity education channels. We examine the issue using data from 49 countries in sub-Saharan Africa for the period 2004-2018 divided into: (i) 42 countries for the period 2004-2014; and (ii) 49 countries for the period 2008-2018. Given the overwhelming evidence of negative net effects in the first sample, an extended analysis is used to establish thresholds of ICT penetration that nullify the established net negative effects. We found that in order to enhance female labor force participation, the following ICT thresholds are worthwhile for the secondary education channel: 165 mobile phone penetration per 100 people, 21.471 internet penetration per 100 people and 3.475 fixed broadband subscriptions per 100 people. For the same outcome of inducing a positive effect on female labor force participation, a 31.966 internet penetration per 100 people threshold, is required for the mechanism of tertiary school education. These computed thresholds have economic meaning and policy relevance because they are within the established ICT policy ranges. In the second sample, a mobile phone penetration threshold of 122.20 per 100 people is needed for the tertiary education channel to positively affect female labor force participation.
    Keywords: Africa; ICT; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2020–01
  14. By: Daisuke Ikeda (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail:
    Abstract: Further progress in digital money, electronically stored monetary value, may enable pricing in units of any currency in any country. This paper studies monetary policy in such a world, using a two- country open economy model with nominal rigidities. The findings are three-fold. First, domestic monetary policy becomes less effective as digital dollarization - pricing using digital money, denominated in and pegged to a foreign currency - deepens. Second, digital dollarization is more likely to occur in a smaller country that is more open to trade and has a greater tradable sector and stronger input-output linkages. Third, monetary policy can facilitate or discourage digital dollarization depending on its stance on the stabilization of macroeconomic variables.
    Keywords: Digital money, monetary policy, dollarization
    JEL: E52 F41
    Date: 2020–12
  15. By: Robert Serrano
    Abstract: The digital revolution has brought about a wave of technological optimism, sustained by all the things technology does for us in our every day lives. This is in principle good, but it has a dark side, as the poor use of the new technologies may lead us to become lazier and to replace or strain rational processes of deliberation with the mechanical accumulation of numbers and data, which, allegedly, help objective and clear decision-making. This dark side produces a number of pathologies, which we could term \digitalitis." Manifestations of digitalitis include top5itis in the world of academic publishing, VAR-itis in the world of soccer, scooteritis in the world of means of transportation, or digital populism in democratic societies.
    Date: 2019
  16. By: Mattila, Juri; Ali-Yrkkö, Jyrki; Seppälä, Timo
    Abstract: Abstract Cyber threats are rapidly increasing around the world. In Finland, the amount of data breaches has doubled in a couple of years. The cost of being targeted for a cyber attack is estimated to increase even more rapidly. However, the economic effects of cyber threats on the Finnish economy are not comprehensively understood. Especially, very little is known about the state of microenterprises in this regard. While the level of cybersecurity in Finnish companies is above the European average, Finland is falling behind the top countries according to many different indicators. Especially data leaks appear to be particularly challenging for Finnish companies. The global demand of cybersecurity products and services is growing quickly. In Finland, however, this growth is restricted by a shortage of skilled cybersecurity professionals. As Finland invests heavily in the improvement of digital skills, the question arises whether these efforts are focused correctly in regards to competences in cybersecurity.
    Keywords: Cybersecurity, Digitalization, Microenterprise, International competitiveness
    JEL: L86 M15 O33
    Date: 2020–12–14
  17. By: Basil Guggenheim; Sébastien P. Kraenzlin; Christoph Meyer
    Abstract: We use unique individual bank-to-bank repo transaction data to empirically assess the efficiency of the existing Swiss financial market infrastructure (FMI) for executing delivery versus payment transactions. This approach enables us to identify its current benefits and drawbacks and discuss how these could be addressed and to what extent distributed ledger technology (DLT) could provide a remedy. We find that the fastest settlement time for repo transactions is 12 seconds, but that settlements are often delayed by more than 10 minutes due to the lack of collateral availability. We conclude that the cross-border availability of securities needs to be addressed by either improving interoperability of existing infrastructures or using new technologies.
    Keywords: Financial market infrastructure, secured money market, distributed ledger
    JEL: G15 G21 G23
    Date: 2020
  18. By: Fernando E. Alvarez; David O. Argente
    Abstract: We estimate the private benefits for Uber riders from using alternative payment methods. We focus on Mexico where riders have the option to use cash or credit cards to pay for rides. We use three field experiments involving approximately 400,000 riders to estimate the loss of private benefits for riders if a ban on cash payments is implemented. We find that Uber riders, using cash as means of payment either sometimes or exclusively, suffer an average loss of approximately 50% of their expenditures on trips paid in cash before the ban.
    JEL: E4 E5
    Date: 2020–11
  19. By: He, Qing; Li, Xiaoyang
    Abstract: We investigate the influence of financial and political factors on peer-to-peer (P2P) platform failures in China’s online lending market. Using a competing risk model for platform survival, we show that large platforms, platforms with listed firms as large shareholders, and platforms with better information disclosure were less likely to go bankrupt or run off (platform owners abscond with investor funds). More importantly, failing platforms were much less likely to run off in advance of major political events, but more likely to declare bankruptcy or run off after such events. These effects are more pronounced for politically connected platforms, platforms operating in provinces where local officials have close ties with central government, and in provinces with better local financial conditions. Our study highlights the role of political incentives on government regulatory intervention in platform failures.
    JEL: G33 G21 G23 P26
    Date: 2020–12–15
  20. By: Elena Pokryshevskaya (National Research University Higher School of Economics); Evgeny Antipov (National Research University Higher School of Economics)
    Abstract: In this paper we use detailed data on 4,599 hotels located in Rome collected from TripAdvisor, the world's largest travel platform, to examine the causal effects of bubble ratings (detailed to half-bubbles) on hotel popularity measured with the number of people viewing the hotel’s page. By using a regression discontinuity design, we find that bubble presentation of ratings does not create any significant jumps at cutoffs. This result is different from those obtained in previous studies of similarly designed rating systems from other industries. Another finding is that web users tend to shortlist hotels with the bubble rating of at least 3. Despite that, there is no strong evidence of review manipulation around the 2.75 cutoff to make a transition from the 2.5-bubble rating to the 3-bubble rating. Potential uses of the number of views as a proxy of demand in hospitality and tourism research are outlined.
    Keywords: regression discontinuity, ratings, sales, booking, hotel reviews, TripAdvisor
    JEL: L83 M31
    Date: 2020
  21. By: Steffen Elstner; Christian Grimme; Valentin Kecht; Robert Lehmann
    Abstract: We study whether technology gains in sectors related to Information and Communications Technology (ICT) increase productivity in the rest of the economy. To separate exogenous gains in ICT from other technological progress, we use the relative price of ICT goods and services in a structural VAR with medium-run restrictions. Using local projections to estimate the effect of ICT-related technology gains on sectoral technology (TFP), we find two sets of results. First, since the mid-2000s there have been positive and persistent technology spillovers to sectors intensively using ICT. Second, neglecting leasing activity leads to an overestimation of the TFP response for all sectors except the leasing sector, where it is strongly underestimated.
    Keywords: digitization, information and communications technology, technology shocks, local projections, structural VARs, medium-run restrictions, growth accounting
    JEL: C32 D24 E22 E24 O33 O47 O52
    Date: 2020
  22. By: International Monetary Fund
    Abstract: The COVID-19 pandemic is having a severe impact on Lesotho’s economy. Supply chains for major industries have been disrupted and a national shutdown to contain the virus curtailed economic activity with adverse social impacts. The economy is expected to be further hit by declining external demand for textiles and diamonds, shrinking remittances, and delays to major construction projects. The authorities are taking measures to contain the virus and are implementing plans to mitigate its health and economic consequences. The economic shock, as well as the additional required spending, have generated urgent balance-of-payments (BOP) needs. Lesotho does not have an arrangement with the Fund.
    Keywords: Public debt;External debt;COVID-19 ;Stress testing;Debt sustainability analysis;ISCR,CR,financing,pandemic,support,emergency financing request
    Date: 2020–07–30
  23. By: Hacıoglu Sinem (Bank of England - Bank of England, King‘s College London); Diego Känzig (London Business School); Paolo Surico (London Business School, CEPR - Center for Economic Policy Research - CEPR)
    Abstract: The top quartile of the income distribution accounts for almost half of the pandemic-related decline in aggregate consumption, with expenditure for this group falling much more than income. In contrast, the bottom quartile of the income distribution has seen the smallest spending cuts and the largest earnings drop but their total incomes have fallen by much less because of the increase in government benefits. The decline in consumers' spending preceded the introduction of the lockdown, whose partial lifting has triggered a stronger recovery in sectors with a lower contact rate. The largest spending contractions are concentrated in the most affluent regions. These conclusions are based on detailed high-frequency transaction data on spending, earnings and income from a large fintech company in the United Kingdom.
    Keywords: spending,earnings,income,benefits,heterogeneity,pandemic
    Date: 2020–11
  24. By: International Monetary Fund
    Abstract: This Selected Issues paper focuses on Haiti near and medium-term challenges and policy priorities and was prepared before coronavirus disease 2019 became a global pandemic and resulted in unprecedented strains in global trade, commodity and financial markets. The outbreak has greatly amplified uncertainty and downside risks around the outlook. The IMF staff is closely monitoring the situation and will continue to work on assessing its impact and the related policy response in Haiti and globally. Income inequality can hamper economic growth and development. Currently, the financial needs of the rural poor are sustained by microfinance institutions, financial cooperatives, humanitarian programs, and remittance providers. Greater financial inclusion could also be reached via solutions outside of traditional banking practices, including through fintech initiatives. In addition to being a moral imperative, addressing gender inequality is necessary for generating broad-based and inclusive growth. Formal employment opportunities for women need to be expanded. A good start would be to implement the 30 percent quota reserved for women in public-sector appointments, which was introduced in 2012 but never enforced.
    Keywords: Education;Electricity;Income inequality;Fuel prices;Imports;ISCR,CR,Haiti,trade,income,expor
    Date: 2020–04–20
  25. By: World Bank
    Keywords: Poverty Reduction - Migration and Development Social Protections and Labor - Labor Markets Macroeconomics and Economic Growth - Remittances
    Date: 2020–03
  26. By: World Bank
    Keywords: Poverty Reduction - Migration and Development Social Protections and Labor - Employment and Unemployment Social Protections and Labor - Labor Markets Macroeconomics and Economic Growth - Remittances
    Date: 2020–04
  27. By: International Monetary Fund
    Abstract: The Covid-19 pandemic has ended a period of buoyant growth averaging about 6 ½ percent over the last 6 years. Containment measures, lower external demand, reduced remittances, and the sudden stop of travel and tourism are taking a significant toll on the economy. Without forceful policy measures, the current crisis could unravel development gains over the last decade. The authorities have taken strong actions to contain the pandemic and mitigate its economic fallout, supported by significant additional external financing from Senegal’s development partners. The IMF disbursed US$442 million (100 percent of quota) under the RFI/RCF in April.
    Keywords: Public debt;COVID-19 ;Debt service;Budget planning and preparation;Loans;ISCR,CR,authority,debt service Suspension Initiative,Senegal,private sector
    Date: 2020–07–24
  28. By: Godfrey I. Ihedimma (Spiritan University, Nneochi, Abia State, Nigeria); Godstime I. Opara (Imo State University, Owerri, Imo State, Nigeria)
    Abstract: Nigeria is unarguably one of the countries with its citizens widely spread across the globe and the income earned forms a huge chunk of remittance back to Nigeria. The study focuses on what implications remittances may have for unemployment in Nigeria. Remittance is treated as being endogenously determined by the number of migrants, the nominal exchange rate (with the Naira as local currency), the inflation rate and the migrants’ income. Data from 1981 to 2019 is calibrated for structural break points and stationarity under conditions of regimes changes. While the data was found to have been affected by regime changes and stationary in levels, an Instrumental Variable Regression model was estimated and it was found that remittance positively and significantly influence unemployment. However, when remittance is interacted with the dependants in Nigeria, unemployment is observed to fall. The study strongly recommends that fiscal planning should take an account of the inflow of remittances when curbing unemployment. The study further recommends that there is the need to deliberately encourage a rise in the demand for the Naira as this would protect the value of locally produced goods from being eroded by remittances.
    Keywords: Remittance, Dependant, Endogenous, Financial Openness, Unemployment, Interaction, IV Estimation
    JEL: F24 J61 O15
    Date: 2020–01

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