nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2021‒03‒01
39 papers chosen by
Bernardo Bátiz-Lazo
Northumbria University

  1. On using agent-based modeling and simulation for studying blockchain systems By Önder Gürcan
  2. Central Bank Digital Currencies and payments: A review of domestic and international implications By Lilas Demmou; Quentin Sagot
  3. Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in Canada and the United States By Marie-Hélène Felt; Fumiko Hayashi; Joanna Stavins; Angelika Welte
  4. Open Banking: Credit Market Competition When Borrowers Own the Data By Zhiguo He; Jing Huang; Jidong Zhou
  5. Parallel Digital Currencies and Sticky Prices By Harald Uhlig; Taojun Xie
  6. How Decentralized is the Governance of Blockchain-based Finance: Empirical Evidence from four Governance Token Distributions By Johannes Rude Jesnen; Victor von Wachter; Omri Ross
  7. The analysis of digital marketing tactics of selected insurance companies in Croatia By Petra Leonora Cvitanović
  8. On the Effects of the Availability of Means of Payments: The Case of Uber By Fernando E. Alvarez; David O. Argente
  9. Free Riding in Products with Positive Network Externalities: Empirical Evidence from a Large Mobile Network By Belo, Rodrigo; Ferreira, Pedro
  10. Estimating Policy Functions in Payments Systems Using Reinforcement Learning By Pablo S. Castro; Ajit Desai; Han Du; Rodney Garratt; Francisco Rivadeneyra
  11. Investors’ Beliefs and Asset Prices: A Structural Model of Cryptocurrency Demand By Matteo Benetton; Giovanni Compiani
  12. Cash and crises: No surprises by the virus By Rösl, Gerhard; Seitz, Franz
  13. Measuring consumer well-being from using zero price digital services: The case of navigation apps and location-based services By Maciej Sobolewski
  14. Digital labour in the Philippines: Emerging forms of brokerage By Soriano, Cheryll Ruth
  15. Identifying deposits' outflows in real-time By Edoardo Rainone
  16. The Adoption of Blockchain Technology in Supply Chains: An Investigation in Logistics By Toptancı, Ali İskan
  17. Exploring the role of Awareness, Government Policy, and Infrastructure in adapting B2C E-Commerce to East African Countries By Emmanuel H. Yindi; Immaculate Maumoh; Prisillah L. Mahavile
  18. Digitalizing Firms: Skills, Work Organization and the Adoption of New Enabling Technologies By Valeria Cirillo; Lucrezia Fanti; Andrea Mina; Andrea Ricci
  19. ICOs White Papers: identity card or lark mirror? By Paola Cerchiello; Anca Mirela Toma; Marco Caluzzi
  20. Supporting Financial Inclusion with Graph Machine Learning and Super-App Alternative Data By Luisa Roa; Andr\'es Rodr\'iguez-Rey; Alejandro Correa-Bahnsen; Carlos Valencia
  21. Digital infrastructure for the internationalization of small and medium-sized enterprises in the Republic of Korea By Lee, Jonhoo
  22. The dynamics of knowledge flows in online communities : the case of digital social innovation By Müge Özman; Cédric Gossart
  23. Do truth-telling oaths improve honesty in crowd-working? By Nicolas Jacquemet; Alexander James; Stéphane Luchini; James Murphy; Jason Shogren
  24. Privacy and data protection in India and Germany: A comparative analysis By Arora, Kim
  25. Professionalisation of short-term rentals and emergent tourism gentrification in post-crisis Thessaloniki By Katsinas, Philipp
  26. Blockchains, Collateral and Financial Contracts By Alexander Karaivanov
  27. Skill up or get left behind? Digital skills and labor market outcomes in the Netherlands By Marielle Non; Milena Dinkova; Ben Dahmen
  28. Las pensiones y las nuevas formas de empleo de la revolución digital By María Luz Rodríguez Fernández
  29. Data-driven analysis of central bank digital currency (CBDC) projects drivers By Toshiko Matsui; Daniel Perez
  30. Complex World Money. By Hanappi, Hardy
  31. Central Bank Digital Currency: When Price and Bank Stability Collide By Linda Schilling; Jesús Fernández-Villaverde; Harald Uhlig
  32. Summarizing Online Conversation of Indonesia Tourism Industry using Network Text Analysis By Andry Alamsyah; Sheila Shafira; Muhamad Alfin Yudhistira
  33. Governance of Data Sharing : a Law & Economics Proposal By Graef, Inge; Prüfer, Jens
  34. Raising a caution flag on US financial sanctions against China By Jeffrey J. Schott
  35. Jobs Interventions For Young Women In The Digital Economy By Datta, Namita; Robinson, Danielle
  36. The Twin Endogeneities Hypothesis: A Theory of Central Bank Evolution By Daniyal Khan
  37. Book Review of 'Banks and Finance in Modern Macroeconomics' by Claudio Sardoni and Bruna Ingrao By Acosta, Juan; Assistant, JHET
  38. Transaction Fee Economics in the Ethereum Blockchain By Alexander Karaivanov; Anil Donmez
  39. Technology Diffusion By Nancy Stokey

  1. By: Önder Gürcan (LIST - Laboratoire d'Intégration des Systèmes et des Technologies - DRT (CEA) - Direction de Recherche Technologique (CEA) - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay)
    Abstract: Bitcoin is the core of decentralized cryptocurrency systems. The underlying data structure of Bitcoin is called the blockchain in which transactions of digital coins between accounts are batched in so-called blocks, where each block is appended to the last one in a cryptographic way to make the malicious/accidental change of blocks content very hard. Participants following this protocol can create together a distributed, economical, social and technical system where anyone can join/leave and perform transactions in-between without neither needing to trust each other nor having a trusted third party. It is a very attractive technology since it maintains a public, immutable and ordered log of transactions which guarantees an auditable ledger accessible by anyone.
    Date: 2020–11–02
  2. By: Lilas Demmou; Quentin Sagot
    Abstract: Recent technological developments linked to secure messaging and traceability present an opportunity to address certain challenges in international and domestic payment systems. From an international perspective, foreign exchange markets remain costly and relatively less efficient than domestic payment systems. From a domestic perspective, the decline in the relative importance of cash in most economies reflects changes in consumers’ preferences, which questions the future of money and payment infrastructure. Against that background, private initiatives falling outside of current regulation, such as stable coins and other virtual assets, are associated with several risks and opportunities and have fueled the debate on the opportunities for central banks to issue new form of digital public currency. This note reviews those different propositions and examine their implication for the international and domestic payment systems.
    Keywords: CBDC, central banking, digital currency, international markets, payment systems
    JEL: E42 F33 G28
    Date: 2021–02–05
  3. By: Marie-Hélène Felt; Fumiko Hayashi; Joanna Stavins; Angelika Welte
    Abstract: Using data from Canada and the United States, 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 Canada and the United States.
    Keywords: Bank notes; Financial institutions; Financial services; Market structure and pricing; Payment clearing and settlement systems
    JEL: D12 D23 D31 E42 G21 L81
    Date: 2021–02
  4. By: Zhiguo He (University of Chicago - Booth School of Business; NBER); Jing Huang (University of Chicago - Booth School of Business); Jidong Zhou (Yale University - School of Business)
    Abstract: Open banking facilitates data sharing consented by customers who generate the data, with a regulatory goal of promoting competition between traditional banks and challenger fintech entrants. We study lending market competition when sharing banks’ customer data enables better borrower screening or targeting by fintech lenders. Open banking could make the entire financial industry better off yet leave all borrowers worse off, even if borrowers could choose whether to share their data. We highlight the importance of equilibrium credit quality inference from borrowers’ endogenous sign-up decisions. When data sharing triggers privacy concerns by facilitating exploitative targeted loans, the equilibrium sign-up population can grow with the degree of privacy concerns.
    Keywords: Open banking, data sharing, banking competition, digital economy, winner’s curse, privacy, precision marketing
    Date: 2020
  5. By: Harald Uhlig (University of Chicago - Department of Economics; CEPR; NBER); Taojun Xie (National University of Singapore - Lee Kuan Yew School of Public Policy, Asia Competitiveness Institute)
    Abstract: The recent rise of digital currencies opens the door to their use in parallel alongside official currencies (“dollar†) for pricing and transactions. We construct a simple New Keynesian framework with parallel currencies as pricing units and sticky prices. Relative prices become a state variable. Exchange rate shocks can arise even without other sources of uncertainty. A one-time exchange rate appreciation for a parallel currency leads to persistent redistribution towards the dollar sector and dollar inflation. The share of the non-dollar sector increases when prices in the dollar sector become less sticky and when firms can choose the pricing currency.
    Keywords: Private money, cryptocurrency, digital currency, currency choice, monetary policy
    JEL: E52 E30
    Date: 2020
  6. By: Johannes Rude Jesnen; Victor von Wachter; Omri Ross
    Abstract: Novel blockchain technology provides the infrastructure layer for the creation of decentralized appli-cations. A rapidly growing ecosystem of applications is built around financial services, commonly referred to as decentralized finance. Whereas the intangible concept of decentralization is presented as a key driver for the applications, defining and measuring decentralization is multifaceted. This pa-per provides a framework to quantify decentralization of governance power among blockchain appli-cations. Governance of the applications is increasingly important and requires striking a balance be-tween broad distribution, fostering user activity, and financial incentives. Therefore, we aggregate, parse, and analyze empirical data of four finance applications calculating coefficients for the statistical dispersion of the governance token distribution. The gauges potentially support IS scholars for an objective evaluation of the capabilities and limitations of token governance and for fast iteration in design-driven governance mechanisms.
    Date: 2021–02
  7. By: Petra Leonora Cvitanović (Microsoft Croatia)
    Abstract: Insurance companies don’t always implement the same marketing tactics as their competitors, which is especially visible in the digital environment, where all of the aspects of digital marketing strategy can be compared more easily. Designing a digital marketing strategy is not an easy task because marketing specialists need to choose between many available digital platforms and select a combination of marketing tactics that will be most effective in a certain period of time. What the situation is like at Croatian insurance market is shown at the example of selected insurance companies. The independently conducted secondary research and analysis include the analysis of Google search results of insurance terms and names of insurance companies, an individual and a comparative analysis of insurance companies’ websites, as well as consolidation of marketing tactics applied at social media sites and YouTube channels in a one-year period. Constructive review of encountered digital marketing tactics is given, and best-practice cases highlighted. The goal of this paper is to determine in which way could the insurance companies improve their digital presence, alongside their clients’ satisfaction, their user experience, and subsequently improve own online sales results. In the research, internet sources were used, together with databases and literature on digital marketing and competitive positioning. The research shows different levels of digital presence of the analyzed insurance companies. While some of them are quite successful in the digital environment, the others are still not using all the benefits of some digital platforms. Through developing awareness of different digital marketing tactics applied in practice, and through learning from competitors through benchmarking, every insurance company can improve own business results.
    Keywords: digital marketing tactics, social media marketing, digital presence, insurance companies, e-Commerce, competitive analysis
    JEL: M31
    Date: 2021–02–19
  8. By: Fernando E. Alvarez (University of Chicago - Department of Economics; NBER); David O. Argente (Pennsylvania State University - Department of Economics)
    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
  9. By: Belo, Rodrigo; Ferreira, Pedro
    Abstract: We study the effect of peer influence on products that exhibit positive network externalities to non-adopters, i.e., products that benefit adopters' friends even if they do not adopt. Contrary to products that exhibit positive network externalities upon adoption, this structure of incentives likely results in negative peer influence: the more friends that adopted the product, the smaller the incentives to adopt. We measure this effect empirically by using observational data from a large mobile carrier serving 5.7 million users. We estimate the effect of peer influence across five different products of this type. A naive approach to do so results in a positive estimate for peer influence due to unobserved homophily. We follow two approaches to address this issue. First, we suggest using the number of friends that end up adopting the product as a proxy for unobserved user fixed effects. Second, we control for homophily by applying a shuffle test, i.e., we compare the effect of peer influence from the original data with the effect obtained from comparable randomly generated data without peer influence. We get negative estimates from both approaches, which provides robustness to our findings. Finally, we show that even for these products, the effect of peer influence associated with the first friends that adopt the product is positive, which arises because they still convey useful information about reducing uncertainty. The negative effect of peer influence arises only for the subsequent friends that adopt the product. These friends are unlikely to convey new information about the product, but each of them decreases the economic incentive to adopt, resulting in a negative aggregate effect of peer influence.
    Date: 2021–02–14
  10. By: Pablo S. Castro; Ajit Desai; Han Du; Rodney Garratt; Francisco Rivadeneyra
    Abstract: This paper uses reinforcement learning (RL) to approximate the policy rules of banks participating in a high-value payments system. The objective of the agents is to learn a policy function for the choice of amount of liquidity provided to the system at the beginning of the day. Individual choices have complex strategic effects precluding a closed form solution of the optimal policy, except in simple cases. We show that in a simplified two-agent setting, agents using reinforcement learning do learn the optimal policy that minimizes the cost of processing their individual payments. We also show that in more complex settings, both agents learn to reduce their liquidity costs. Our results show the applicability of RL to estimate best-response functions in real-world strategic games.
    Keywords: Digital currencies and fintech; Financial institutions; Financial system regulation and policies; Payment clearing and settlement systems
    JEL: A12 C7 D83 E42 E58
    Date: 2021–02
  11. By: Matteo Benetton (University of California, Berkeley - Haas School of Business); Giovanni Compiani (University of Chicago - Booth School of Business)
    Abstract: We explore the impact of investors’ beliefs on cryptocurrency demand and prices using three new individual-level surveys. We find that younger individuals with lower income and education are more optimistic about the future value of cryptocurrencies, as are late investors. We then estimate the cryptocurrency demand functions using a structural model with rich heterogeneity in investors’ beliefs and preferences. To identify the model, we combine observable beliefs with an instrumental variable strategy that exploits variation in the amount of energy required for the production of the different cryptocurrencies. We find that beliefs explain a large fraction of the cross-sectional variance of returns. A counterfactual exercise shows that banning entry of late investors leads to a decrease in the price of Bitcoin by about $3,500, or approximately 30% of the price during the boom in January 2018. Late investors’ optimism alone can explain about a third of the decline.
    Keywords: Beliefs, demand system, cryptocurrencies, surveys, sentiment, retail investors
    JEL: D84 G11 G41
    Date: 2020
  12. By: Rösl, Gerhard; Seitz, Franz
    Abstract: Despite the increasing use of cashless payment instruments, the notion that cash loses importance over time can be unambiguously refuted. In contrast, the authors show that cash demand increased steeply over the past 30 years. This is not only true on a global scale, but also for the most important currencies in advanced countries (USD, EUR, CHF, GBP and JPY). In this paper, they focus especially on the role of different crises (technological crises, financial market crises, natural disasters) and analyse the demand for small and large banknote denominations since the 1990s in an international perspective. It is evident that cash demand always increases in times of crises, independent of the nature of the crisis itself. However, largely unaffected from crises we observe a trend increase in global cash aligned with a shift from transaction balances towards more hoarding, especially in the form of large denomination banknotes.
    Keywords: Cash,banknotes,crises,Corona
    JEL: E41 E51 E58
    Date: 2021
  13. By: Maciej Sobolewski (European Commission – JRC)
    Abstract: Digital maps and navigation applications are considered an essential tool by 70% of smartphone users. As these apps come predominantly free of charge, their contribution to consumer well-being cannot be captured by the common economic measures, like the GDP. This study demonstrates how the discrete choice experiment approach can be applied to measure, in an economically consistent way, consumer surplus from a navigation service. We elicit preferences for a satellite navigation with the two optional location-based functionalities: real-time traffic information and location-sensitive commercial information. In the experiment, the respondents are confronted with a range of location-sharing conditions set by a navigation provider. Finally, we estimate a demand model and derive welfare measures from the collected choices. Median consumer surplus from using basic satellite navigation without location-based functionalities is estimated at 8.06 EUR per month. Adding location-based services can increase this gain by 36% to 10.98 EUR, provided that users maintain control over location disclosure. Location-sharing terms set by a provider and privacy concerns of users both affect the size of the surplus from a navigation service.
    Keywords: zero price digital goods, navigation, digital maps, choice experiment, consumer surplus, location
    JEL: C25 D12 L51
    Date: 2021–02
  14. By: Soriano, Cheryll Ruth
    Abstract: This article examines and theorises the relationships across three distinct forms of labour brokerage emerging in the digital platform labour economy: platform intermediation, ‘skill-making’, and ‘re-outsourcing’. Drawing from a four-year digital ethnography on online freelancing and platform labour in the Philippines, one of the largest labour supplying countries globally, I pay special attention to how platform labour control emerges as a process that is constituted in the brokerage relationships at multiple scales between global capital, local capital, community and family units, and emerging organised networks of workers and influencers on social media. The article examines the materiality of platform labour and the local informal economy that give rise to these forms of brokerage. I also describe how brokerage processes set norms and standards in this largely unregulated sector, thereby playing a role in how labour mobility or precarity are made possible and organised. The article seeks to contribute to the knowledge about the digital work system involving a significant number of Filipinos by capturing the situated dialectical power relations of the global spread of platform-mediated labour management.
    Date: 2021–02–10
  15. By: Edoardo Rainone (Bank of Italy)
    Abstract: We propose a method based on control charts to identify in real-time sudden deposits' outflows through payment systems. The performance of the methodology is assessed with both Monte Carlo simulations and real transaction-level TARGET2 data for a large sample of Italian banks. We identify a set of idiosyncratic bank stress episodes and show that deposits are generally shifted to other banks, mainly large and domestic, generating a size premium; only a limited amount migrates to foreign banks. Under the fixed-rate, full allotment regime, the liquidity drain is mostly offset through open market operations.
    Keywords: depositors' trust, interbank networks, payment systems, money, control charts, digital economy, financial stability
    JEL: E50 E40 G01 G10 G21
    Date: 2021–02
  16. By: Toptancı, Ali İskan
    Abstract: Blockchain in Supply Chain Management (SCM) is expected to become a more demanded technology in the next five years. The global blockchain supply chain market is projected to grow at a combined annual growth rate of 87%, from $ 45 million in 2018 to $ 3 billion by 2023. Blockchain will improve the business for all global supply chain stakeholders by providing enhanced traceability, facilitating digitization, and securing the chain of custody. This study provides a synthesis of the current challenges in global supply chain and trade operations, as well as the relevant capabilities and potential of blockchain. In addition, this study will present leading pilot initiatives to implement blockchain technology in supply chains and the logistics industry to meet various needs. By discussing the effects of blockchain on customs and government institutions; The difficulties in ensuring the wide distribution of blockchain technology in global supply chain management will be discussed.
    Keywords: Supply Chain Management,Blockchain,Global Trade,Logistics
    Date: 2021
  17. By: Emmanuel H. Yindi; Immaculate Maumoh; Prisillah L. Mahavile
    Abstract: -It has considered almost 30 years since the emergence of e-commerce, but it is still a global phenomenon to this day. E-commerce is replacing the traditional way of doing business. Yet, expectations of sustainable development have been unmet. There are still significant differences between online and offline shopping. Although many academic studies have conducted on the adoption of various forms of ecommerce, there are little research topics on East African countries, The adoption of B2C e-commerce in East African countries has faced many challenges that have been unaddressed because of the complex nature of e-commerce in these nations. This study examines the adaptation of B2C in East Africa using the theory of diffusion of innovation. Data collected from 279 participants in Tanzania were used to test the research model. The results show that awareness, infrastructure innovation and social media play a significant role in the adoption of e-commerce. Lack of good e-commerce policy and awareness discourages the adoption of B2C. We also examine how time influences the adaptation of B2C e-commerce to the majority. So, unlike previous adoption studies, which have tended to focus on technology, organizational, and environmental factors, this study guides the government on how to use social media to promote B2C e-commerce.
    Date: 2021–02
  18. By: Valeria Cirillo; Lucrezia Fanti; Andrea Mina; Andrea Ricci
    Abstract: New enabling technologies are shaping the transformation of production activities. This process of change is characterised by growing digitization, inter-connectivity and automation. The diffusion of new technologies is, however, very uneven, and firms display different adoption behaviours. By using panel data on a large representative sample of Italian firms, we explore the patterns and determinants of new digital technology adoption. We build our theoretical framework on the nexus between technology, skills and the organisation of work. We then provide novel econometric evidence on the positive effects of human capital and training. Among the notable results of the paper, labour flexibility does not seem to favour new technology adoption, whereas second-level collective bargaining plays a positive role in the process. Results also show heterogeneous effects between large vs. small and medium-size firms, and between manufacturing and service sectors.
    Keywords: Digital technologies; Industry 4.0; skills; human capital; work organisation.
    Date: 2021–02–05
  19. By: Paola Cerchiello (University of Pavia); Anca Mirela Toma (University of Pavia); Marco Caluzzi (University of Pavia)
    Abstract: The Initial Coin Offering (ICO) is one of the operations based on DLT or blockchain technology that allows fundraising activities for an entrepreneurial project, by issuing utility tokens instead of a security or an equity token. ICOs are a new and promising tool to support innovative ideas with the potential, due to the underlying technology, to shape the future of the fundraising systems and architectures. The present paper is twofold: on one hand, it offers a dataset of 760 ICOs containing several variables, completely checked, harmonized and validated through the comparison of alternative sources, that can be used as a benchmark for further analysis. On the other hand, it investigates research hypothesis aimed at highlighting plausible success drivers that can be extracted from white papers taking into account also the team composition and the social media exposure. Our results show that the variables derived from the white papers, such as the existence of the appendix, the picture of the team, the sections and the nr. of pages are statistically significant with a differentiated impact on the probability of success or failure of an ICO.
    Keywords: ICO, whitepaper, information disclosure, blockchain, social exposure
    Date: 2021–01
  20. By: Luisa Roa; Andr\'es Rodr\'iguez-Rey; Alejandro Correa-Bahnsen; Carlos Valencia
    Abstract: The presence of Super-Apps have changed the way we think about the interactions between users and commerce. It then comes as no surprise that it is also redefining the way banking is done. The paper investigates how different interactions between users within a Super-App provide a new source of information to predict borrower behavior. To this end, two experiments with different graph-based methodologies are proposed, the first uses graph based features as input in a classification model and the second uses graph neural networks. Our results show that variables of centrality, behavior of neighboring users and transactionality of a user constituted new forms of knowledge that enhance statistical and financial performance of credit risk models. Furthermore, opportunities are identified for Super-Apps to redefine the definition of credit risk by contemplating all the environment that their platforms entail, leading to a more inclusive financial system.
    Date: 2021–02
  21. By: Lee, Jonhoo
    Abstract: Small and medium-sized enterprises (SMEs) account for a significant share of the exports of the Republic of Korea, in large part thanks to the sophisticated digital support infrastructure available to these firms. This document analyses how the government implemented this infrastructure over the last decades in close coordination with the private sector. It also presents the prominent institutions and their digital SME export support instruments. Lastly, it identifies some future challenges and recommendations for Latin America and the Caribbean.
    Date: 2021–02–15
  22. By: Müge Özman (LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School, MMS - Département Management, Marketing et Stratégie - TEM - Télécom Ecole de Management - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School); Cédric Gossart (LITEM - Laboratoire en Innovation, Technologies, Economie et Management (EA 7363) - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay - IMT-BS - Institut Mines-Télécom Business School, DEFI - Département Droit, Economie et Finances - TEM - Télécom Ecole de Management - IMT - Institut Mines-Télécom [Paris] - IMT-BS - Institut Mines-Télécom Business School)
    Date: 2020–07–02
  23. By: Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Alexander James (University of Alaska [Anchorage]); Stéphane Luchini (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); James Murphy (University of Alaska [Anchorage]); Jason Shogren (UW - University of Wyoming)
    Abstract: This study explores whether an oath to honesty can reduce both shirking and lying among crowd-sourced internet workers. Using a classic coin-flip experiment, we first confirm that a substantial majority of Mechanical Turk workers both shirk and lie when reporting the number of heads flipped. We then demonstrate that lying can be reduced by first asking each worker to swear voluntarily on his or her honor to tell the truth in subsequent economic decisions. Even in this online, purely anonymous environment, the oath significantly reduced the percent of subjects telling "big" lies (by roughly 27%), but did not affect shirking. We also explore whether a truth-telling oath can be used as a screening device if implemented after decisions have been made. Conditional on flipping response, MTurk shirkers and workers who lied were significantly less likely to agree to an ex-post honesty oath. Our results suggest oaths may help elicit more truthful behavior, even in online crowd-sourced environments
    Keywords: Experimental Economics,Honesty,Solemn Oath,Mechanical Turk,Lying,Shirking
    Date: 2021–01
  24. By: Arora, Kim
    Abstract: This research report offers a comparative analysis of privacy and data protection in Germany and India. It compares the two regimes on four counts. First, it examines how the right to privacy and/or its allied rights have developed in the two countries historically. In this, it explores the political factors contributing to the understanding and acceptability of the principles of privacy in the decades after the Second World War. Second, it delves into the instruments and forms of state surveillance employed by both the countries and analyses how the presence of parliamentary and judicial oversight on intelligence agencies impacts individual privacy. In the third section, it compares how biometric identity systems have been deployed in the two countries, the safeguards designed around the same, and the legal challenges they have thrown up. Lastly, it evaluates data subject rights as defined under the General Data Protection Regulation (GDPR) together with the Bundesdatenschutzgesetz-Neu (BDSG-Neu) and how they compare with those as defined under the Draft Personal Data Protection Bill, 2018 in the Indian context.
    Keywords: data protection,surveillance,biometrics,Internet regulation,comparative analysis,India,Germany
    Date: 2020
  25. By: Katsinas, Philipp
    Abstract: This paper contributes to research on short-term rentals (STRs), their suppliers and their impact on housing and the local community, focusing on Thessaloniki, a recessionary city off the tourist map until recently. Through the conduction of in-depth interviews with hosts and other key informants, and the analysis of quantitative data on Airbnb listings, I argue that: (1) far from enabling a sharing economy, Airbnb facilitates (re)investment in housing by different types of hosts. But investors outcompete amateur hosts and contribute to the professionalisation of STRs and the concentration of revenues. (2) the extraction of higher rents through STRs leads to the displacement of tenants and to gentrification in cities previously considered as ungentrifiable, driven by increased tourism and the short-term character of these rentals. However, the type and scale of investors involved, and the impact of gentrification are conditioned by contextual differences and the position of cities in the international competition to attract tourists.
    Keywords: Airbnb; gentrification; housing; Thessaloniki; tourism
    JEL: R14 J01
    Date: 2021–01–20
  26. By: Alexander Karaivanov (Simon Fraser University)
    Abstract: I map the link between financial contracts and the algorithmic tools and constraints of blockchain technology related to property rights, information, commitment, and enforcement. I describe and formalize the microfoundations and possible use of blockchains as direct conduit for implementing financial contracts in incomplete markets settings and as collateral mechanism for on- and off-chain transactions and contracts.
    Date: 2021–01
  27. By: Marielle Non (CPB Netherlands Bureau for Economic Policy Analysis); Milena Dinkova (CPB Netherlands Bureau for Economic Policy Analysis); Ben Dahmen (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: People with low digital skills relatively often do not have a paid job, and if they do, they earn a relatively low hourly wage. Those are the most important findings of CPB research based on a newly constructed dataset combining digital skills with labor market outcomes. About a quarter of Dutch people aged between 16 and 65 does not reach a basic digital skills level. This implies that people find it hard to use email or internet and to process digital information. Based on our analysis, people who do not reach this basic digital skills level have a significantly lower hourly wage than people with good digital skills, even if we correct for background characteristics such as age, gender, educational level, literacy and numeracy. We also find that people with low digital skills relatively often do not have a paid job making them financially dependent on state benefits or a partner with a paid job. In general, people with low digital skills are older, more often female and have a low education level. Relatively often, those people are not born in the Netherlands, and they have low literacy and numeracy skills. Want to know more about people with low digital skills? Then read this ESB article (in Dutch) in which we further discuss the findings of this research.
    JEL: J24 J31 C21 C83
    Date: 2021–02
  28. By: María Luz Rodríguez Fernández
    Abstract: En este paper se explican las razones de la desprotección social en que se hallan los trabajadores de la economía de plataforma por desarrollar un empleo atípico y autónomo. Ello viene en mucha medida motivado porque los modelos de seguridad social bismarckiano y de Beveridge se han configurado teniendo en cuenta el empleo típico, de manera que proporcionan menor protección a quienes desarrollan empleos atípicos, incluidos los trabajadores autónomos, que es la fórmula de empleo que se utiliza por las plataformas digitales.
    Date: 2021–02
  29. By: Toshiko Matsui; Daniel Perez
    Abstract: In this paper, we use a variety of machine learning methods to quantify the extent to which economic and technological factors are predictive of the progression of Central Bank Digital Currencies (CBDC) within a country, using as our measure of this progression the CBDC project index (CBDCPI). We find that a financial development index is the most important feature for our model, followed by the GDP per capita and an index of the voice and accountability of the country's population. Our results are consistent with previous qualitative research which finds that countries with a high degree of financial development or digital infrastructure have more developed CBDC projects. Further, we obtain robust results when predicting the CBDCPI at different points in time.
    Date: 2021–02
  30. By: Hanappi, Hardy
    Abstract: In its 500 years of evolution, the capitalist mode of production has produced different forms of the most abstract incarnation of what the human species uses as the material carrier of general social value - of money. Social value in disguise permeates all internal models of social agents, from individuals via households and firms to state agencies. In a sense, we have arrived at a situation where the largest and most powerful social agents are still a handful of nation-states, of self-determined ‘global players’. Their respective national value system is partly made comparable by the existence of a military hegemon, the USA and its US Dollar. Less powerful nation-states are aligned along with the dominance of the US Dollar. To fulfil its manifold tasks, the global Dollar system has developed highly complex features, most of them incorporated in what today is called ‘international finance’. If the victory of a single nation-state (‘America first’) over a democratic global governance system fails, this will also imply a different sign-system for global social value. Not just different geographical location, but also other dimensions of diversity will have to be taken into account. In short, the complexity of a new form of world money will rise dramatically. By following the historical and logical evolution of money this contribution sketches some basic features of an upcoming complex global money.
    Keywords: Money, Political Economy, Complexity
    JEL: B52 E40 E50 P0
    Date: 2021–02–25
  31. By: Linda Schilling (École Polytechnique - CREST; CEPR); Jesús Fernández-Villaverde (University of Pennsylvania - Department of Economics; CEPR; NBER); Harald Uhlig (University of Chicago - Department of Economics; CEPR; NBER)
    Abstract: A central bank digital currency, or CBDC, may provide an attractive alternative to traditional demand deposits held in private banks. When offering CBDC accounts, the central bank needs to confront classic issues of banking: conducting maturity trans- formation while providing liquidity to private customers who suffer “spending†shocks. We analyze these issues in a nominal version of a Diamond and Dybvig (1983) model, with an additional and exogenous price stability objective for the central bank. While the central bank can always deliver on its nominal obligations, runs can nonetheless occur, manifesting themselves either as excessive real asset liquidation or as a failure to maintain price stability. We demonstrate an impossibility result that we call the CBDC trilemma: of the three goals of efficiency, financial stability (i.e., absence of runs), and price stability, the central bank can achieve at most two.
    Keywords: Central bank digital currency, monetary policy, bank runs, financial intermediation, inflation targeting, CBDC trilemma
    JEL: E58 G21
    Date: 2020
  32. By: Andry Alamsyah; Sheila Shafira; Muhamad Alfin Yudhistira
    Abstract: The tourism industry is one of the potential revenues and has an important role in economics in Indonesia. The tourism Industry brings job and business opportunities, foreign exchange earnings, and infrastructure development, tourism also plays the role of one of the main drivers in socio-economic progress in Indonesia. The number of foreign tourists visiting Indonesia increase cumulatively and has reached 10.41 million visits or an increase of 10.46 percent from the same period in the previous year. Government trying to increase the number of tourists to visit Indonesia by promoting many Indonesian tourist attractions.
    Date: 2021–02
  33. By: Graef, Inge (Tilburg University, TILEC); Prüfer, Jens (Tilburg University, TILEC)
    Keywords: Data sharing; data-driven markets; economic governance; competition law; data protection; regulation
    Date: 2021
  34. By: Jeffrey J. Schott (Peterson Institute for International Economics)
    Abstract: China’s policies in Xinjiang, Hong Kong, and the South China Sea and its ongoing support for Iran, North Korea, and Venezuela pose major challenges for the United States, where bipartisan pressure is growing to ramp up punitive sanctions against leading Chinese firms and financial institutions. Financial sanctions freeze the US assets or bar US entry of the targeted individuals and firms and prohibit US financial firms from doing business with them. Schott explains why US officials should carefully weigh the risks to international financial markets and US economic interests before imposing punitive sanctions on major financial institutions engaged with China. The collateral costs of such sanctions would be sizable, damaging US producers, financial institutions, and US alliances. By restricting access of major banks to international payments in US dollars and barring use of messaging systems like SWIFT, tougher US financial sanctions would effectively “weaponize” the dollar; friends and foes alike would be pushed to seek alternatives to dollar transactions that, over time, would weaken the international role of the dollar. Instead of doubling down on current unilateral financial sanctions, US policy should deploy sanctions in collaboration with allies and calibrate trade and financial controls to match the expected policy achievements.
    Date: 2021–01
  35. By: Datta, Namita; Robinson, Danielle
    Abstract: This Jobs Solutions Note identifies practical solutions for development practitioners to proactively integrate gender inclusion in digital jobs programs. Based on curated knowledge and evidence for a specific topic and relevant to jobs, the Jobs Solutions Notes are not intended to be exhaustive; they provide key lessons, solutions and approaches synthesized from the experiences of the World Bank Group and partners. This Note draws from S4YE’s 2018 annual report, Digital Jobs for Youth: Young Women in the Digital Economy, highlighting new and emerging strategies to designing gender-inclusive digital jobs interventions for youth. The Note employs a nuanced definition of 'digital jobs' to enable practitioners and policy makers to develop a range of interventions tailored to specific contexts and target groups, to improve young women’s employment outcomes from digital jobs programs.
    Keywords: young woman; limited access to finance; youth; digital skills; labor force participation rate; income-generating opportunity; computers and the internet; project design and implementation; Fragile, Conflict & Violence; small and medium size enterprise; skill need; youth employment; skill training programs; skills and support; labor market opportunities; youth unemployment rate; self-employment and entrepreneurship; lack of content; highly skilled worker; approach to training; needs of woman; digital gender divide; availability of transport; informal labor market; barrier to woman; return on investment; private sector partner; support for entrepreneur; private sector company; women in technology; access to ict; fragile and conflict; technical skills training; creative problem solving; people with disability; Gender and ICT; opportunity for woman; civil society actor; local labor market; barriers for woman; gender mainstreaming strategy; business process outsourcing; digital economy; female entrepreneur; digital divide
    Date: 2020–04–29
  36. By: Daniyal Khan (Department of Economics, New School for Social Research)
    Abstract: The paper outlines a theory according to which central banking evolves as the result of an interaction between endogenous money and endogenous institutions. This theory is called the twin endogeneities hypothesis and forms the basis for two models which are developed and used to explain two stylized facts of central bank evolution. These models are examples of operationalization of the hypothesis. The first model, combining endogenous money and hysteresis, explains the first stylized fact, namely that there are two different origin tendencies in the history of central banking. The second model is a heuristic model which combines the swings of the Polanyi pendulum (or the Polanyian double movement) with swings in long run central bank independence to explain the latter. These examples serve to demonstrate how the twin endogeneities hypothesis, a theory in the tradition of institutionalist Post Keynesianism, can be used to develop models which help us unpack and address the evolution of central banking from a theoretical point of view.
    Keywords: Endogeneity, evolution, money, institutions, central banking
    JEL: B52 E02 E5
    Date: 2021–02
  37. By: Acosta, Juan; Assistant, JHET
    Abstract: Book Review of 'Banks and Finance in Modern Macroeconomics' by Claudio Sardoni and Bruna Ingrao, Northampton, MA, Edward Elgar, 2019, 288 pp.
    Date: 2021–02–12
  38. By: Alexander Karaivanov (Simon Fraser University); Anil Donmez (Simon Fraser University)
    Abstract: We study the economic determinants and dynamics of transaction fees in the Ethereum blockchain. The transaction fee is an endogenous price for service, paid when a direct transfer or smart-contract transaction is recorded on the blockchain. We estimate an empirical model based on queueing theory and analyze the factors determining the Ethereum "gas price", i.e., transaction cost per unit of service, "gas". Using detailed block-level and transaction-level data obtained directly from the Ethereum blockchain, we show that changes in network service demand significantly a ect the marginal and median gas price: when there is high block utilization, per-unit transaction fees increase on average, with a very strong non-linear threshold effect above 90% utilization. We also find that the transaction type is an important factor - a larger fraction of regular transactions (direct transfers between users, as opposed to smart contract calls), is associated with higher gas price.
    Date: 2021–01
  39. By: Nancy Stokey (University of Chicago - Department of Economics)
    Abstract: The importance of new technologies derives from the fact that they spread across many different users and uses, as well as different geographic regions. The diffusion of technological improvements, across producers within a country and across international borders, is critical for long run growth. This paper looks at some evidence on adoption patterns in the U.S. for specific innovations, reviews some evidence on the diffusion of new technologies across international boundaries, and looks at two theoretical frameworks for studying the two types of evidence. One focuses on the dynamics of adoption costs, the other on input costs.
    JEL: O14 O33
    Date: 2020

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