nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2021‒11‒22
25 papers chosen by

  1. O Tell Me The Truth About Central Bank Digital Currency By Riccardo De Bonis; Giuseppe Ferrero
  2. Regulating big tech: From competition policy to sector regulation? By Budzinski, Oliver; Mendelsohn, Juliane
  3. Price Stability of Cryptocurrencies as a Medium of Exchange By Tatsuru Kikuchi; Toranosuke Onishi; Kenichi Ueda
  4. Fintech and Financial Inclusion in Latin America and the Caribbean By Mrs. Marina V Rousset; Frederic Lambert; Jose Torres; Luis Herrera; Grey Ramos; Mr. Dmitry Gershenson
  5. Blending Advertising with Organic Content in E-Commerce: A Virtual Bids Optimization Approach By Carrion, Carlos; Wang, Zenan; Nair, Harikesh; Luo, Xianghong; Lei, Yulin; Lin, Xiliang; Chen, Wenlong; Hu, Qiyu; Peng, Changping; Bao, Yongjun; Yan, Weipeng
  6. The Mobile Phone in Governance for Environmental Sustainability in Sub-Saharan Africa By Asongu, Simplice; Nting, Rexon
  7. Humanistic Digital Governance By Snower, Dennis J.; Twomey, Paul
  8. Antecedents of Customer Loyalty (CL) in the Mobile Telecommunication Companies in Cameroon By Tarkang, Marymagdaline; Yunji, Ruth; Asongu, Simplice; Alola, Uju
  9. Ask "Who", Not "What": Bitcoin Volatility Forecasting with Twitter Data By M. Eren Akbiyik; Mert Erkul; Killian Kaempf; Vaiva Vasiliauskaite; Nino Antulov-Fantulin
  10. Bank Money Creation and the Payments System By Biagio Bossone
  11. Crypto-exchanges and Credit Risk: Modelling and Forecasting the Probability of Closure By Fantazzini, Dean; Calabrese, Raffaella
  12. Perverse Ethical Concerns: Online Platforms and Offline Conflicts By Chang, Dongkyu; Vong, Allen
  13. Pagos electrónicos y uso del efectivo en los comercios colombianos 2020 By Carlos A. Arango-Arango; Yanneth Rocío Betancourt-García; Manuela Restrepo-Bernal; Germán Zuluaga-Giraldo
  14. Cash: A Blessing or a Curse? By Fernando Alvarez; David Argente; Rafael Jimenez; Francesco Lippi
  15. Analysis of Competition Policies between U.S. and EU in the Era of Inter-Industry Convergence By Kang, Gusang; Jang, Yungshin; Oh, Taehyun; Rim, Jeewoon
  16. Rainfall Risk and Nonfarm Self-Employment in Rural China: Does Digital Finance Have a Role to Play? By Wang, Jing; Lyu, Kaiyu; Lv, Xinye; Feil, Jan-Henning
  17. Towards efficient information sharing in network markets By Bertin Martens; Geoffrey Parker; Georgios Petropoulos; Marshall Van Alstyne
  18. Estimating the Prostitution Population in the Netherlands and Belgium: A Capture-Recapture Application to Online Data By Azam, Anahita; Hendrickx, Jef; Adriaenssens, Stef
  19. China's digital policy: A threat to European business models By Demary, Vera; Matthes, Jürgen
  20. What Drives Financial Sector Development in Africa? Insights from Machine Learning By Isaac K. Ofori; Christopher Quaidoo; Pamela E. Ofori
  21. Credit Card Trends Begin to Normalize after Pandemic Paydown By Andrew F. Haughwout; Donghoon Lee; Daniel Mangrum; Joelle Scally; Wilbert Van der Klaauw
  22. Assessing the nexus between mobile financial service usage and inflation – evidence from Bangladesh By Ehsan, Zaeem-Al
  23. Forecasting internal migration in Russia using Google Trends: Evidence from Moscow and Saint Petersburg By Fantazzini, Dean; Pushchelenko, Julia; Mironenkov, Alexey; Kurbatskii, Alexey
  24. Financial inclusion and legal system quality: are they correlated? By Ozili, Peterson Kitakogelu
  25. ICT Diffusion, Foreign Direct Investment and Inclusive Growth in Sub-Saharan Africa By Ofori, Isaac K.; Asongu, Simplice

  1. By: Riccardo De Bonis (Bank of Italy); Giuseppe Ferrero (Bank of Italy)
    Keywords: central bank digital euro, history of money, payment system, digitalization, digital euro
    JEL: E42 E58
    Date: 2021–11
  2. By: Budzinski, Oliver; Mendelsohn, Juliane
    Keywords: big tech,digital economy,digital ecosystems,GAFAM,competition policy,antitrust,Digital Markets Act (DMA),sector-specific regulation,law and economics
    JEL: K21 K23 K24 L40 L50 L81 L86
    Date: 2021
  3. By: Tatsuru Kikuchi (Faculty of Economics, The University of Tokyo); Toranosuke Onishi (Tokio Marine & Nichido Fire Insurance Co., Ltd.); Kenichi Ueda (Faculty of Economics, The University of Tokyo)
    Abstract: We present positive evidence of price stability of cryptocurrencies as a medium of exchange. For the sample years from 2016 to 2020, the prices of major cryptocurrencies are found to be stable, relative to major financial assets. Specifically, after filtering out the less-than-one-month cycles, we investigate the daily returns in US dollars of the major cryptocurrencies (i.e., Bitcoin, Ethereum, and Ripple) as well as their comparators (i.e., major legal tenders, the Euro and Japanese yen, and the major stock indexes, S&P 500 and MSCI World Index). We examine the stability of the filtered daily returns using three different measures. First, the Pearson correlations increased in later years in our sample. Second, based on the dynamic time-warping method that allows lags and leads in relations, the similarities in the daily returns of cryptocurrencies with their comparators have been present even since 2016. Third, we check whether the cumulative sum of errors to predict cryptocurrency prices, assuming stable relations with comparators’ daily returns, does not exceeds the bounds implied by 1 the Black-Scholes model. This test, in other words, does not reject the efficient market hypothesis.
    Date: 2021–11
  4. By: Mrs. Marina V Rousset; Frederic Lambert; Jose Torres; Luis Herrera; Grey Ramos; Mr. Dmitry Gershenson
    Abstract: Despite some improvement since 2011, Latin America and the Caribbean continue to lag behind other regions in terms of financial inclusion. There is no clear evidence that fintech developments have supported greater financial inclusion in LAC, contrary to what has been observed elsewhere in the world. Case studies by national policy experts suggest that barriers to entry in the financial sector, along with a constraining regulatory environment, may have hindered a faster adoption of fintech. However, fintech development seems to have accelerated in the wake of the COVID-19 pandemic and with the support of recent policy initiatives.
    Keywords: fintech development; policy initiative; financial product; cash transfer program; ACH Colombia; electronic cash; per capita income; credit card payment; Financial inclusion; Fintech; Financial sector; Caribbean; Middle East and Central Asia; Central America; South America; Asia and Pacific
    Date: 2021–08–20
  5. By: Carrion, Carlos (; Wang, Zenan (; Nair, Harikesh (Stanford University); Luo, Xianghong (; Lei, Yulin (; Lin, Xiliang (; Chen, Wenlong (; Hu, Qiyu (; Peng, Changping (; Bao, Yongjun (; Yan, Weipeng (
    Abstract: In e-commerce platforms, sponsored and non-sponsored content are jointly displayed to users and both may interactively influence their engagement behavior. The former content helps advertisers achieve their marketing goals and provides a stream of ad revenue to the platform. The latter content contributes to users’ engagement with the platform, which is key to its long-term health. A burning issue for e-commerce platform design is how to blend advertising with content in a way that respects these interactions and balances these multiple business objectives. This paper describes a system developed for this purpose in the context of blending personalized sponsored content with non-sponsored content on the product detail pages of, an e-commerce company. This system has three key features: (1) Optimization of multiple competing business objectives through a new virtual bids approach and the expressiveness of the latent, implicit valuation of the platform for the multiple objectives via these virtual bids. (2) Modeling of users’ click behavior as a function of their characteristics, the individual characteristics of each sponsored content and the influence exerted by other sponsored and non-sponsored content displayed alongside through a deep learning approach; (3) Consideration of externalities in the allocation of ads, thereby making it directly compatible with a Vickrey-Clarke-Groves (VCG) auction scheme for the computation of payments in the presence of these externalities. The system is currently deployed and serving all traffic through JD.coms mobile application. Experiments demonstrating the performance and advantages of the system are presented.
    Date: 2021–05
  6. By: Asongu, Simplice; Nting, Rexon
    Abstract: In this study, we assess how the mobile phone can be leveraged upon to improve the role of governance in environmental sustainability in 44 Sub-Saharan African countries. The Generalised Method of Moments is used to establish policy thresholds. A threshold is a critical mass or level of mobile phone penetration at which the net effect of governance on Carbon dioxide (CO2) emissions changes from positive to negative. Mobile phone penetration thresholds associated with negative conditional effects are: 36 (per 100 people) for political stability/no violence; 130 (per 100 people) for regulation quality; 146.66 (per 100 people) for government effectiveness; 65 (per 100 people) for corruption-control and 130 (per 100 people) for the rule of law. Practical and theoretical implications are discussed. The study provides thresholds of mobile phone penetration that are critical in complementing governance dynamics to reduce CO2 emissions.
    Keywords: CO2 emissions; ICT; Economic development; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2021–01
  7. By: Snower, Dennis J. (Hertie School of Governance); Twomey, Paul (Global Solutions Initiative)
    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
    JEL: O33 P34 O35 O36 O38 H41 L41 L44 L51
    Date: 2020–12
  8. By: Tarkang, Marymagdaline; Yunji, Ruth; Asongu, Simplice; Alola, Uju
    Abstract: The mobile telecommunication (telecom) sector has become the basic source of information now-a-days especially in Cameroon. It is used to transfer and deliver information through voice, video, data, graphics, and more at perpetually increasing speeds. The quality of mobile services does not only impact the attraction of new customers but also to maintain the existing ones. The study uses relationship marketing theory and a quantitative and cross-sectional method with 200 respondents. Information was obtained from users of MTN and Orange mobile telecommunication networks. The analyses were done using SPSS version 20. Tangibility, reliability, and assurance dimensions of staff service quality showed a positive relationship with customer loyalty in mobile telecom companies in Cameroon. The findings also highlight the influence of service quality dimensions on customer loyalty in the mobile telecom companies of the country. This study complements to extant literature by examining the influence of the five service quality dimensions; tangibility, reliability, assurance, responsiveness, and empathy on consumer loyalty or retention in the mobile telecommunication companies in Cameroon.
    Keywords: Tangibility, Reliability, ICT, Empathy, Responsiveness, Assurance, customer loyalty
    JEL: L96 O1 O55
    Date: 2021–01
  9. By: M. Eren Akbiyik; Mert Erkul; Killian Kaempf; Vaiva Vasiliauskaite; Nino Antulov-Fantulin
    Abstract: Understanding the variations in trading price (volatility), and its response to external information is a well-studied topic in finance. In this study, we focus on volatility predictions for a relatively new asset class of cryptocurrencies (in particular, Bitcoin) using deep learning representations of public social media data from Twitter. For the field work, we extracted semantic information and user interaction statistics from over 30 million Bitcoin-related tweets, in conjunction with 15-minute intraday price data over a 144-day horizon. Using this data, we built several deep learning architectures that utilized a combination of the gathered information. For all architectures, we conducted ablation studies to assess the influence of each component and feature set in our model. We found statistical evidences for the hypotheses that: (i) temporal convolutional networks perform significantly better than both autoregressive and other deep learning-based models in the literature, and (ii) the tweet author meta-information, even detached from the tweet itself, is a better predictor than the semantic content and tweet volume statistics.
    Date: 2021–10
  10. By: Biagio Bossone
    Abstract: This article investigates how the role that banks play in the payment system space affects their money creation power and process. In particular, the article analyzes how the payments market share of each bank affects its money creation power and how payment settlement technologies and rules determine the banks’ demand for funding and, hence, their money creation power. Also, as the power to create money enables money creators to extract extra-profits or rents ("seigniorage") from the economy, the article evaluates analytically how banks extract seigniorage through money creation and how bank seigniorage differs from profits from pure financial intermediation. By showing the central role that payment systems play in the context of such an important economics topic as money creation, the article seeks to emphasize the relevance of payment system analysis for macroeconomic theory and practice and points to the need for achieving better integration of the two disciplines.
    Keywords: Bank; Bank money creation; Central bank policy; Demand deposits; Financial intermediaries; Funding; Lending; Payment and settlement systems
    JEL: E51 E58 G21
    Date: 2021–11
  11. By: Fantazzini, Dean; Calabrese, Raffaella
    Abstract: While there is an increasing interest in crypto-assets, the credit risk of these exchanges is still relatively unexplored. To fill this gap, we consider a unique data set on 144 exchanges active from the first quarter of 2018 to the first quarter of 2021. We analyze the determinants of the decision of closing an exchange using credit scoring and machine learning techniques. The cybersecurity grades, having a public developer team, the age of the exchange, and the number of available traded cryptocurrencies are the main significant covariates across different model specifications. Both in-sample and out-of-sample analyses confirm these findings. These results are robust to the inclusion of additional variables considering the country of registration of these exchanges and whether they are centralized or decentralized.
    Keywords: Exchange; Bitcoin; Crypto-assets; Crypto-currencies; Credit risk; Bankruptcy; Default Probability
    JEL: C21 C35 C51 C53 G23 G32 G33
    Date: 2021
  12. By: Chang, Dongkyu; Vong, Allen
    Abstract: We study a model where many citizens learn a hidden state individually on an online platform. The platform slants news and imperfectly filters misinformation, triggering conflicts about the state among the citizens. We show that a platform that faces an ethical concern to internalize conflict costs could perversely aggravate conflicts. This cautionary observation highlights that societal efforts to mitigate conflicts, such as investments in ethical algorithms, public awareness campaigns, and government policies, are effective if and only if their implementations are sufficiently aggressive.
    Keywords: platforms, social media, polarization, conflicts
    JEL: C72 D83 L86
    Date: 2021–11–05
  13. By: Carlos A. Arango-Arango; Yanneth Rocío Betancourt-García; Manuela Restrepo-Bernal; Germán Zuluaga-Giraldo
    Abstract: Con el fin de estudiar la dinámica reciente de los pagos electrónicos en Colombia, el Banco de la República llevó a cabo en el año 2020 una encuesta al sector comercio en donde se analizan diferentes aspectos de la aceptación y uso de distintos instrumentos de pago. La encuesta revela altos niveles de aceptación de instrumentos de pago electrónicos frente a estudios anteriores, alcanzando el 50% de los comercios encuestados. Se destaca en particular una superación de barreras en la informalidad pues, uno de cada dos comercios informales acepta hoy en día alguna forma de pago electrónico. Dado el contexto en el que se llevó a cabo la encuesta, se realizó un módulo de preguntas relacionadas con el período de pandemia asociada al COVID-19, observándose que ésta ha favorecido la adopción de instrumentos y canales electrónicos por parte de los establecimientos de comercio para facilitar los pagos de los clientes, especialmente los no presenciales. A pesar de la creciente disponibilidad y aceptación de instrumentos y canales de pago electrónicos, el efectivo sigue dominando los pagos en las ventas de los comercios, principalmente por el bajo uso de estos medios electrónicos por parte de los consumidores. Por su parte, los comercios encuestados reportaron que el 77% de sus gastos de funcionamiento se hacen en efectivo y que las transferencias bancarias dominan los pagos electrónicos; siendo los micro comercios los que tienen la mayor dependencia del efectivo (95,7%), principalmente para hacer sus pagos de nómina. De esta manera, los resultados señalan que los pagos electrónicos siguen siendo bajos, a pesar de la creciente adopción de servicios de pago electrónicos. **** ABSTRACT: To study the recent dynamics of electronic payments in Colombia, Banco de la República carried out in 2020 a survey of the commerce sector on acceptance and usage of different payment instruments. The survey reveals merchants´ high levels of acceptance of electronic payment instruments compared to previous studies, reaching 50% of the businesses surveyed. Overcoming informality barriers stands out, since one out of every two informal businesses now accept electronic payments. Given the context in which the survey was carried out, it included a set of questions related to the COVID-19 pandemic. The results show that the pandemic has favored the adoption of electronic instruments and channels by merchants, facilitating customer payments, especially remote ones. Despite the increasing availability and acceptance of electronic payment instruments and channels, cash continues to dominate merchants´ sales, mainly due to the low use of electronic payment methods by consumers. On the other hand, the surveyed businesses reported that 77% of their operating expenses are made in cash and that bank transfers dominate their electronic payments. Micro-businesses have the greatest dependence on cash (95.7%) for their operational expenses like payroll. The results indicate that electronic payments remain low, despite the growing adoption of electronic payment services by merchants.
    Keywords: Efectivo, instrumentos de pago, pagos electrónicos, tarjetas de pago, comercios, Cash, payment instruments, electronic payments, payment cards, merchants
    JEL: C81 C83 D23 E41 E42 E58
    Date: 2021–11
  14. By: Fernando Alvarez (University of Chicago); David Argente (Pennsylvania State University); Rafael Jimenez (University of Chicago); Francesco Lippi (LUISS University and EIEF)
    Abstract: We use two quasi-natural experiments that encouraged the use of debit cards and facilitated the use of ATMs in Mexico to estimate the elasticity of crime and informality to the availability of cash as means of payment. We then construct a simple model to quantify the private costs of restricting cash-usage in the economy. Our model captures the degree of substitution between cash and other payment methods at both the intensive and the extensive margins. We estimate the welfare effects of restricting cash by means of three key inputs: i) the elasticity of substitution between cash and credit, ii) the share of expenditures in cash by type of good obtained from detailed micro data, and iii) the elasticity of crimes to the availability of cash as means of payment. The social benefits of restricting cash usage are driven by the reduction of some criminal activities. The costs arise from the distortions that the anti-cash regulation imposes on the individual choices regarding the means of payment. We find that the private costs of heavily taxing the use cash outweigh the social benefits that we identify.
    Date: 2021
    Abstract: In the era of inter-industry convergence, abuses of substantial market power by large digital platforms such as Google, Apple, Facebook, and Amazon, and their increasing number of acquisitions towards small- and medium-sized tech-firms suspicious of eliminating potential competitors are recent representative issues in the ICT sector. Alternative competition policies have been discussed to effectively deal with those firms' anti-competitive behaviors in a changing environment of competition such as a digital platform economy instead of traditional policies. In this regard, we examine the U.S. and EU competition policy responses to ICT firms' anti-competitive behaviors in order to provide policy implications to our competition authority. According to our case studies, the U.S. and EU competition and legal authorities consider characteristics of the digital platform economy when they conclude whether firm behaviors are anti-competitive. Furthermore, we find that Facebook's acquisition of WhatsApp leads to a tipping effect and harms market competition. Given these results, we suggest that our competition authority has to consider the balance between innovation and competition when they implement competition policies in the era of inter-industry convergence.
    Keywords: U.S.; EU; convergence; competition; ICT
    Date: 2021–04–15
  16. By: Wang, Jing; Lyu, Kaiyu; Lv, Xinye; Feil, Jan-Henning
    Keywords: Agricultural Finance, Labor and Human Capital
    Date: 2021–08
  17. By: Bertin Martens; Geoffrey Parker; Georgios Petropoulos; Marshall Van Alstyne
    Abstract: Our paper has benefitted from inspiring discussions with Erik Brynjolfsson, Luis Cabral, Rebecca Christie, Maria Demertzis, Erika Douglas, Nestor Duch-Brown, Justus Haucap, Jan Krämer , Maciej Sobolewski, Sebastian Steffen, Tommaso Valletti, Reinhilde Veugelers, Guntram Wolff as well as participants at Ascola 2021, Yale University’s Big Tech and Antitrust Conference 2020, OECD Competition Committee Hearing Dec. 2020, Bruegel, Digital Markets Competition Forum at Copenhagen Business School 16 June 2021, and the...
    Date: 2021–11
  18. By: Azam, Anahita; Hendrickx, Jef; Adriaenssens, Stef
    Abstract: Evidence-based risk-prevention policies for people involved in prostitution require that reliable population estimates are built. This study proposes a methodological framework and novel data source for measuring their population in regions where the internet plays a predominant role in the industry. We derive single registration capture-recapture population estimates using the Zelterman approach. The resulting estimates for the Netherlands and Belgium are lower than previous rough estimates. We find that relative to the overall population of the two countries, the proportion of sex workers are roughly identical despite differing legal environments.
    Keywords: Hidden population, Sex worker population, Population size estimation, Capture-recapture, Internet data
    JEL: E26 I18 J16 Z13
    Date: 2021–10–17
  19. By: Demary, Vera; Matthes, Jürgen
    Abstract: China is making great strides in regulating digitization. Some aspects are similar to European approaches, but Chinese laws on data security and protection go much further. This may result in a threat to European business models.
    Date: 2021
  20. By: Isaac K. Ofori (University of Insubria, Varese, Italy); Christopher Quaidoo (University of Professional Studies, Accra, Ghana); Pamela E. Ofori (University of Insubria, Varese, Italy)
    Abstract: This study uses machine learning techniques to identify the key drivers of financial development in Africa. To this end, four regularization techniques— the Standard lasso, Adaptive lasso, the minimum Schwarz Bayesian information criterion lasso, and the Elasticnet are trained based on a dataset containing 86 covariates of financial development for the period 1990 – 2019. The results show that variables such as cell phones, economic globalisation, institutional effectiveness, and literacy are crucial for financial sector development in Africa. Evidence from the Partialing-out lasso instrumental variable regression reveals that while inflation and agricultural sector employment suppress financial sector development, cell phones and institutional effectiveness are remarkable in spurring financial sector development in Africa. Policy recommendations are provided in line with the rise in globalisation, and technological progress in Africa.
    Keywords: Africa, Elasticnet, Financial Development, Financial Inclusion, Lasso, Regularization, Variable Selection
    JEL: C01 C14 C52 C53 C55 E5 O55
    Date: 2021–01
  21. By: Andrew F. Haughwout; Donghoon Lee; Daniel Mangrum; Joelle Scally; Wilbert Van der Klaauw
    Abstract: Today, the New York Fed’s Center for Microeconomic Data released its Quarterly Report on Household Debt and Credit for the third quarter of 2021. Overall debt balances increased, bolstered primarily by a sizeable increase in mortgage balances, and for the second consecutive quarter, an increase in credit card balances. The changes in credit card balances in the second and third quarters of 2021 are remarkable since they appear to be a return to the normal seasonal patterns in balances. In a Liberty Street Economics post earlier this year we wrote about some demographic variation in these balance changes and the likely role of stimulus checks and forbearance programs in helping borrowers pay down expensive revolving debt balances. Here, we’ll take a fresh look at credit card balances and at the dynamics behind new and closing credit card accounts and limit changes, to examine how credit access and usage continue to evolve. The Quarterly Report and this analysis are based on our Consumer Credit Panel, which is itself based on Equifax credit data.
    Keywords: household finance; Consumer Credit Panel (CCP)
    JEL: D14
    Date: 2021–11–09
  22. By: Ehsan, Zaeem-Al
    Abstract: This paper set out to uncover the nexus between the propensity of mobile financial service (MFS) usage and inflation in Bangladesh, if any. This paper hypothesizes that the usage of MFS will lead to an increase in the velocity of money, i.e., the ease of using MFS in lieu of cash will lead to money transferring ownership quicker. All things constant, this will lead to inflation—as stipulated by the quantity theory of money. To this end, monthly data pertaining to the general price index, number of MFS agents, number of average daily MFS transactions, number of MFS clients and number of banks supporting MFS transactions have been used ranging from FY16 to FY20, subject to availability. The objective of the paper was to understand the relationship between usage of MFS and inflation, if any. To this end, two models were developed and subsequently tested. Upon undertaking a Johannsen co-integration test, it was found that there is indeed one long run equilibrium relationship between the variables used as per the second model. The use of the Vector Auto Regression (VAR) on model 1 failed to upholster the hypothesis of the paper. The subsequent use of a Vector-Error Correction model (VECM) on model 2 to capture the nexus between the propensity of MFS usage and inflation in Bangladesh also failed to diagnose a statistically significant relationship between MFS velocity and inflation in Bangladesh.
    Keywords: Inflation, MFS, VAR, VECM
    JEL: D4 E51
    Date: 2021–11–01
  23. By: Fantazzini, Dean; Pushchelenko, Julia; Mironenkov, Alexey; Kurbatskii, Alexey
    Abstract: This paper examines the suitability of Google Trends data for the modeling and forecasting of interregional migration in Russia. Monthly migration data, search volume data, and macro variables are used with a set of univariate and multivariate models to study the migration data of the two Russian cities with the largest migration inflows: Moscow and Saint Petersburg. The empirical analysis does not provide evidence that the more people search online, the more likely they are to relocate to other regions. However, the inclusion of Google Trends data in a model improves the forecasting of the migration flows, because the forecasting errors are lower for models with internet search data than for models without them. These results also hold after a set of robustness checks that consider multivariate models able to deal with potential parameter instability and with a large number of regressors.
    Keywords: Migration; Forecasting; Google Trends; VAR; Cointegration; ARIMA; Russia; Time-varying VAR; Multivariate Ridge regression.
    JEL: C22 C32 C52 C53 C55 F22 J11 O15 R23
    Date: 2021
  24. By: Ozili, Peterson Kitakogelu
    Abstract: This study investigates the correlation between financial inclusion and legal system quality among developed countries from 2004 to 2012. The findings reveal a positive correlation between financial inclusion and legal system quality. The findings suggest that improvements in legal system quality goes hand in hand with improvements in the level of financial inclusion. More specifically, higher supply of ATM per 100,000 adults is correlated with stronger insolvency resolution framework among G7, European and non-European countries. Also, the number of bank branch per 100,000 adults is positively correlated with strong rule of law and legal rights in non-European countries. Also, the number of ATMs per 100,000 adults is positively correlated with strength of insolvency resolution framework and negatively correlated with the time it takes to resolve insolvency before, during and after the global financial crisis.
    Keywords: Law, development, financial inclusion, ATM, bank branch, legal rights, legal system, rule of law, insolvency resolution.
    JEL: G20 G21 G28 K00 K12 K23 K40 K42 K49
    Date: 2021–12
  25. By: Ofori, Isaac K.; Asongu, Simplice
    Abstract: This study examines the joint effects of ICT diffusion (composed of access, usage and skills), and foreign direct investment (FDI) on inclusive growth in sub-Saharan Africa (SSA). The study draws on data from the World Bank’s World Development Indicators, and the Global Consumption and Income Project for the period 1980–2019 for the analysis. The study provides evidence robust to several specifications from ordinary least squares and dynamic system GMM estimation techniques to show that: (1) FDI and ICT diffusion and corresponding components (ICT access, usage, skills) induce inclusive growth in SSA; (2) compared to its direct effect, FDI is remarkable in fostering shared growth in SSA in the presence of greater ICT diffusion, and (3) compared to ICT access and usage, ICT skills are more effective in driving inclusive growth in SSA. Overall FDI modulates ICT dynamics to engender positive synergy effects on inclusive growth. Policy recommendations are provided in line with the implementation of the African Continental Free Trade Area (AfCFTA) Agreement and the projected rise in FDI in SSA from 2022.
    Keywords: FDI; ICT Access; ICT Diffusion; ICT Skills; ICT Usage; Inclusive Growth; sub- Saharan Africa
    JEL: E23 F21 F30 L96 O55
    Date: 2021–01

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