nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2022‒08‒15
37 papers chosen by

  1. On the stabilizing role of cash for societies By Rösl, Gerhard; Seitz, Franz
  2. How they hide money? An investigation on tax evasion of large corporations and wealthy taxpayers By Lompo, Miaba Louise; Ouoba, Marie Madeleine
  3. FinTech lending and equity and debt platforms around the world and in Italy By Salvatore Cardillo; Antonio Ilari; Silvia Magri; Giorgio Meucci; Mirko Moscatelli; Dario Ruzzi
  4. Introductory Brief (Part II): Opportunities for Deposit Insurers (DepTech) By Edward Garnett; Rachel Youssef; Daniel Hoople
  5. Is digital government facilitating entrepreneurship? A comparative statics analysis By Joana Costa; Luís Carvalho
  6. Does a CBDC Reinforce Inefficiencies? By Max Fuchs
  7. Can Mobile Technology Improve Female Entrepreneurship? Evidence from Nepal By Mullally, Conner C.; Janzen, Sarah; Magnan, Nicholas; Sharma, Shruti; Shrestha, Bhola
  8. Early contributors, cooperation and fair rewards in crowdfunding By Sylvain Béal; Marc Deschamps; Catherine Refait-Alexandre; Guillaume Sekli
  9. Consumer Naivete and Competitive Add-on pricing on platforms By Ghosh, Meenakshi
  10. A Note on the Regulation of Add-ons By Ghosh, Meenakshi
  11. The online gig economy's impact is not as big as many thought By Lee G. Branstetter
  12. FinTech, General Purpose Technology und Wohlfahrt By Treu, Johannes
  13. Pairwise and high-order dependencies in the cryptocurrency trading network By Tomas Scagliarini; Giuseppe Pappalardo; Alessio Emanuele Biondo; Alessandro Pluchino; Andrea Rapisarda; Sebastiano Stramaglia
  14. Cyber Security and Ransomware in Financial Markets By Toni Ahnert; Michael Brolley; David Cimon; Ryan Riordan
  15. A Study of the Non-Banking Finance Companies in India By Rajeswari Sengupta; Lei Lei Son; Harsh Vardhan
  16. The Fed’s Inaugural Conference on the International Roles of the U.S. Dollar By Ricardo Correa; Linda S. Goldberg; Robert Lerman; Bo Sun
  17. Baseline validation of a bias-mitigated loan screening model based on the European Banking Authority's trust elements of Big Data & Advanced Analytics applications using Artificial Intelligence By Alessandro Danovi; Marzio Roma; Davide Meloni; Stefano Olgiati; Fernando Metelli
  18. BigTech cryptocurrencies - European regulatory solutions in sight By Kotovskaia, Anastasia; Meier, Nicola
  19. Inequality of the crowding-out effect of tobacco expenditure in Colombia Running title: Inequality of the crowding-out effect of tobacco By Gallego, J. M; Paraje, G; Rodríguez-Lesmes, P
  20. Mechanism Design Approaches to Blockchain Consensus By Joshua S. Gans; Richard Holden
  21. Unbiasing and robustifying implied volatility calibration in a cryptocurrency market with large bid-ask spreads and missing quotes By Mnacho Echenim; Emmanuel Gobet; Anne-Claire Maurice
  22. Quantitative Analysis of Implementation Challenges of IoT-Based Digital Supply Chain (Supply Chain 0/4) By Hamed Nozari; Mohammad Ebrahim Sadeghi; Javid Ghahremani nahr; Seyyed Esmaeil Najafi
  23. The Fed’s Inaugural Conference on the International Roles of the U.S. Dollar By Ricardo Correa; Linda S. Goldberg; Robert Lerman; Bo Sun
  24. Do national development factors affect cryptocurrency adoption? By Bhimani, Alnoor; Hausken, Kjell; Arif, Sameen
  25. La Blockchain, avenir des monnaies locales ? By Ariane Tichit; Corentin Elissée; Frédéric Hayek; Pascal Lafourcade
  26. Economía Digital en Tiempos de Pandemia By J. Ignacio Conde-Ruiz; Juan José Ganuza
  27. The influence of Bitcoin's price evolution on the values of other cryptocurrencies: An econometric study By Mohamed El Hamrani; Abderrazak El Hiri
  28. Social Media and Democracy By Gradwohl, Ronen; Heller, Yuval; Hillman, Arye
  29. Monetary policy in the open economy with digital currencies By Pietro Cova; Alessandro Notarpietro; Patrizio Pagano; Massimiliano Pisani
  30. Climate-Contingent Finance By John Nay
  31. Factors Influencing Consumers’ Purchase Intention toward Accommodation via Lodging Websites: Evidence from Binh Duong Province of Vietnam By Dam, Duy Duc; Huynh, Cong Minh
  32. Social Media and Democracy By Ronen Gradwohl; Yuval Heller; Arye Hillman
  33. Bank non-performing loans in the Fintech era By Ozili, Peterson K
  34. Environmental-Social-Governance Preferences and Investments in Crypto-Assets By Pavel Ciaian; Andrej Cupak; Pirmin Fessler; d'Artis Kancs
  35. Price matching and platform pricing By Bottasso, Anna; Marocco, Paolo; Robbiano, Simone
  36. Labour Transitions that Lead to Platform Work: Towards Increased Formality? Evidence from Argentina By Sonia Filipetto; Ariela Micha; Francisca Pereyra; Cecilia Poggi; Martín Trombetta
  37. (Mis-)information technology: Internet use and perception of democracy in Africa By Joël Cariolle; Yasmine Elkhateeb; Mathilde Maurel

  1. By: Rösl, Gerhard; Seitz, Franz
    Abstract: In this paper, we focus on the stabilizing role of cash from a society-wide perspective. Starting with conceptual remarks on the importance of money for the economy in general, special attention is paid to the unique characteristics of cash. As these become apparent especially during crisis periods, a comparison of the Great Depression (1929 - 1933) and the Great Recession 2008/09 shows the devastating effects of a severe monetary contraction and how a fully elastic provision of cash can help to avoid such a situation. We find interesting similarities to both crises in two separate case studies, one on the demonetization in India 2016 and the other on cash supply during various crises in Greece since 2008. The paper concludes that supply-driven cash withdrawals from circulation (either by demonetization or by capital controls) destabilize the economy if electronic payment substitutes are not instantly available. However, as there is no perfect substitute for cash due to its unique properties, from the viewpoint of the society as a whole an efficient payment mix necessarily includes cash: It helps to stabilize the economy not only in times of crises in general, no matter which government is in place. Consequently, it should be the undisputed task of central banks to ensure that cash remains in circulation in normal times and is provided in a fully elastic way in times of crisis.
    Keywords: cash,banknotes,money,crises,stabilization
    JEL: E41 E51 E58
    Date: 2022
  2. By: Lompo, Miaba Louise; Ouoba, Marie Madeleine
    Abstract: Understanding tax evasion and tax avoidance mecanism is of critical importance in both developed and developing countries. This paper shed light on five main strategies used by corporation and wealthy taxpayers to avoid taxes including tax heavens, underground economy, aggressive tax optimization, parallel financial markets and cryptocurrencies. We also propose several actions to deal with tax non-compliance across the globe including prevention, peer reporting, active monitoring of compliance indicators and international cooperation. Theses actions might be combined to achieve optimal results in reducing the iompact of tax evasion and tax avoidance.
    Keywords: tax evasion, tax avoidance, tax compliance
    JEL: M48
    Date: 2022
  3. By: Salvatore Cardillo (Bank of Italy); Antonio Ilari (Bank of Italy); Silvia Magri (Bank of Italy); Giorgio Meucci (Bank of Italy); Mirko Moscatelli (Bank of Italy); Dario Ruzzi (Bank of Italy)
    Abstract: This paper provides evidence on Fintech platforms operating around the world and in Italy, in both lending and funding through debt and equity financing. The platforms act as facilitators, connecting borrowers with potential lenders (individual or institutional investors); with the required authorizations, they can also operate as direct lenders. Excluding China, the volume of transactions has continued to grow in recent years, reaching 113 billion dollars in 2020. Loans represent the main activity, while funding is mostly provided by institutional investors. In Italy too, there has been marked growth in the activities of these platforms, primarily those related to business lending and invoice trading. Despite the considerable growth observed in recent years, Fintech lending still represents a small share of overall loans in all the main countries. At international level, there is an open debate about the necessity to adopt a level playing field, in order to avoid regulatory arbitrage. Possible financial stability concerns regard the lack of official and comparable data across countries about the platforms’ activity.
    Keywords: fintech, crowdfunding, social lending, invoice trading, technological innovation, alternative finance
    JEL: G10 G51 L10 O33 Q55
    Date: 2022–06
  4. By: Edward Garnett (Federal Deposit Insurance Corporation); Rachel Youssef (Federal Deposit Insurance Corporation); Daniel Hoople (Federal Deposit Insurance Corporation)
    Abstract: The International Association of Deposit Insurers (IADI) recently launched a research series that explores innovations in financial technology (fintech) and how these innovations affect deposit insurance systems. The Financial Stability Board has defined fintech as 'technologically enabled financial innovation that could result in new business models, applications, processes or products with an associated material effect on financial markets and institutions and the provision of financial services.' (Financial Stability Board, 2019b). While the growth in consumer use of fintech presents challenges to deposit insurers by blurring the lines between financial products and services offered within and outside the traditional financial system, fintech also provides many opportunities for deposit insurers by creating business efficiencies, quality products, and new frameworks for solving problems, among other improvements. This brief introduces the term 'DepTech', or Deposit Insurer Technology, and defines it as the adoption of new technologies to improve deposit insurer operations. This can include enhanced reporting procedures, improvements to the reimbursement process, and faster depositor access to funds when a bank fails. This brief investigates the opportunities fintech presents to deposit insurers and in doing so, focusses on data standardisation, digital payments, artificial intelligence and machine learning, cloud computing and new media.
    Keywords: deposit insurance, bank resolution
    JEL: G21 G33
    Date: 2022–07
  5. By: Joana Costa (Universidade de Aveiro); Luís Carvalho (Universidade do Porto)
    Abstract: Promoting entrepreneurship has become a government priority worldwide. At the same time, digital technology has been embraced by governmental authorities, particularly focusing on digital infrastructure and online service provision. In this paper, we explore whether there might be a connection between both policy ambitions – notably at the local level. To do so, we empirically assess the relationship between different dimensions of government digitalization and entrepreneurial dynamics, using panel data from 278 Portuguese municipalities between 2014 and 2019, primarily drawn from the Portuguese survey on government ICT deployment (IUTIC) and analyzed through compared regression models. Results suggest an overall positive effect of digital government efforts on entrepreneurship. However, digital openness, a user-focus and transparency initiatives seem to matter more to entrepreneurship than internally-oriented digitalization measures. The results provide evidence of the positive effect of government digitalization on entrepreneurship, suggesting that the digital transition may generate relevant social returns for local economies and thus an additional mechanism for the promotion of smart and sustained growth.
    Keywords: e-government, digital transition, entrepreneurship, local government
    JEL: H79 L26 M13
    Date: 2022–06
  6. By: Max Fuchs (University of Kassel)
    Abstract: This paper examines whether a central bank digital currency (CBDC) reinforces inefficiencies in transactions with cash. In this case, the gap between the traded quantity and the welfare-maximizing one, which arises due to discounting or a suboptimal amount of money, increases further. To get some answers, the monetary search model of Trejos and Wright (1995) is extended by a CBDC. We show that an interest-bearing CBDC reinforces inefficiencies in transactions with cash since opportunity costs for cash holders and money supply increase. Nevertheless, a CBDC is able to increase welfare as long as the share of CBDC holders is limited.
    Keywords: CBDC, inefficiencies, welfare analysis
    JEL: E31 E41 E51
    Date: 2022
  7. By: Mullally, Conner C.; Janzen, Sarah; Magnan, Nicholas; Sharma, Shruti; Shrestha, Bhola
    Keywords: International Development, Community/Rural/Urban Development
    Date: 2022–08
  8. By: Sylvain Béal (CRESE EA3190, Univ. Bourgogne Franche-Comté, F-25000 Besançon, France); Marc Deschamps (CRESE EA3190, Univ. Bourgogne Franche-Comté, F-25000 Besançon, France); Catherine Refait-Alexandre (CRESE EA3190, Univ. Bourgogne Franche-Comté, F-25000 Besançon, France); Guillaume Sekli (CRESE EA3190, Univ. Bourgogne Franche-Comté, F-25000 Besançon, France)
    Abstract: We address the issue of rewarding fairly contributors participating in a funded crowdfunding project. We develop a theoretical non-strategic model of crowdfunding and introduce on a new reward rule, which specifies the individual rewards obtained by the contributors as a function of both their financial contributions and the timing of these contributions. Our model share some similarities with other models of ressource sharing in which the axiomatic method is frequently used. Taking this approach, we characterize this new reward rule by a pair of natural axioms, and it turns out that the resulting rewards coincide with the Shapley value of a suitable cooperative game built from the crowdfunding project. This allocation rule conveys what we call the signaling effect: if two contributors make the same financial contribution, then the earlier of the two obtains a greater reward. In specific but relevant cases, we provide extra properties of this reward rule.
    Keywords: Crowdfunding, signaling, early contributions, fairness, cooperative games, Shapley value, core
    JEL: C71 G32
    Date: 2022–07
  9. By: Ghosh, Meenakshi
    Abstract: Two sellers trade vertically and horizontally differentiated goods on a platform which charges them a commission fee. Some consumers are naive and do not observe, or consider, add-on prices until after they commit to buying the base good from a seller. We address the following questions. First, how do consumer naivete and costs asymmetries (arising from differences in fees) influence pricing strategies. Second, we examine the welfare loss arising from sub-optimal decisions made by naive consumers who buy the bundle, but fail to factor in its total price at the outset. Third, how does naivete affect seller and platform payoffs.
    Keywords: add-on pricing, consumer naivete, cost asymmetry, horizontal differentiation, vertical differentiation, platform fee, cost pass-through
    JEL: L1 L11
    Date: 2022–06–01
  10. By: Ghosh, Meenakshi
    Abstract: We model a situation where a seller trades a base good, and a bundle of higher quality comprising of the base good with an add-on, through an intermediary which charges a flat commission fee each time it makes a sale. In addition, the add-on can also be bought elsewhere, i.e. from a different provider, on a stand-alone basis. Apart from differences in valuations of quality and their distance from the seller, consumers differ in their levels of sophistication. Specifically, we assume that there is a fraction of consumers who are naive and either unaware that add-ons can be purchased separately from a different provider, or unwilling to deviate (de-select) from the options that have been set for them by default by a seller. This paper examines the impact of regulation (proposed, for instance, by the Financial Conduct Authority in the UK), that requires intermediaries to prompt consumers regarding the availability of stand-alone alternatives. We find that, ironically, regulation that seeks to protect the interests of the naive consumers may sometimes be detrimental to their welfare.
    Keywords: add-on pricing, consumer naivete, regulation, platform fee, cost pass-through
    JEL: L11 L15
    Date: 2022–06–24
  11. By: Lee G. Branstetter (Peterson Institute for International Economics)
    Abstract: The explosive global growth of online ride-hailing platforms raised concern (and, in some quarters, optimism) that similar growth in other platforms could rapidly disrupt traditional labor arrangements on a large scale in advanced economies. But the evidence to date suggests no significant changes in the overall importance of "gig" work in the US labor market nor a significant decline in the importance of traditional employment relationships. Online platforms may play a growing role (relative to traditional "brick-and-mortar" intermediaries) in connecting gig workers to their customers, but that alone does not guarantee a large increase in the importance of gig work. Branstetter reviews this evidence, noting the gaps in labor market data series that make the measurement of this phenomenon so difficult. Even if traditional employment relationships are not likely to decline significantly in the near future, the rise of online gig work nevertheless highlights longstanding inadequacies of labor market regulations, which recognize employees and truly independent contractors but struggle with the intermediate kinds of worker-firm relationships the online platforms enable. Branstetter summarizes proposals for regulating gig economy work and the lessons policymakers in South Korea and other economies can learn from the literature he reviews in this Policy Brief.
    Date: 2022–07
  12. By: Treu, Johannes
    Keywords: Fintech,Finanztechnologie,Wohlfahrt,AS-AD Modell,General Purpose Technology,GPT
    JEL: G20 G23 O10 O30 O33 O49
    Date: 2022
  13. By: Tomas Scagliarini; Giuseppe Pappalardo; Alessio Emanuele Biondo; Alessandro Pluchino; Andrea Rapisarda; Sebastiano Stramaglia
    Abstract: In this paper we analyse the effects of information flows in cryptocurrency markets. We first define a cryptocurrency trading network, i.e. the network made using cryptocurrencies as nodes and the Granger causality among their weekly log returns as links, later we analyse its evolution over time. In particular, with reference to years 2020 and 2021, we study the logarithmic US dollar price returns of the cryptocurrency trading network using both pairwise and high-order statistical dependencies, quantified by Granger causality and O-information, respectively. With reference to the former, we find that it shows peaks in correspondence of important events, like e.g., Covid-19 pandemic turbulence or occasional sudden prices rise. The corresponding network structure is rather stable, across weekly time windows in the period considered and the coins are the most influential nodes in the network. In the pairwise description of the network, stable coins seem to play a marginal role whereas, turning high-order dependencies, they appear in the highest number of synergistic information circuits, thus proving that they play a major role for high order effects. With reference to redundancy and synergy with the time evolution of the total transactions in US dollars, we find that their large volume in the first semester of 2021 seems to have triggered a transition in the cryptocurrency network toward a more complex dynamical landscape. Our results show that pairwise and high-order descriptions of complex financial systems provide complementary information for cryptocurrency analysis.
    Date: 2022–07
  14. By: Toni Ahnert; Michael Brolley; David Cimon; Ryan Riordan
    Abstract: Financial markets face the constant threat of cyber attacks. We develop a principal-agent model of cyber-attacking with fee-paying clients who delegate security decisions to financial platforms. We derive testable implications about clients’ vulnerability to cyber attacks and about the fees charged. We characterize which cyber attacks actors choose. We find that ransomware attacks are more successful than traditional attacks and that platforms underinvest in security when security is unobservable. Regulating security investment (e.g., minimum security standards) or improving transparency (e.g., security ratings) can improve welfare. Our results support regulatory efforts to increase transparency around cyber security and cyber attacks.
    Keywords: Economic models; Financial services; Financial stability; Financial system regulation and policies; Payment clearing and settlement systems
    JEL: D78 D81 G18 G21 G23
    Date: 2022–07
  15. By: Rajeswari Sengupta (Indira Gandhi Institute of Development Research); Lei Lei Son (Asian Development Bank); Harsh Vardhan (SP Jain Institute of Management & Research)
    Abstract: In late 2018, the default by a major non-banking financial company (NBFC) in India led to a credit crunch in the Indian economy. The crisis raises questions about the business model of the NBFCs, and the role they play alongside banks in the economy. In this paper we analyse the evolution of the NBFC sector in India over time and its importance in extending credit and discusses the factors that may have contributed to the 2018 crisis. We attempt to understand the advantages and disadvantages of the business model of NBFCs, and the drivers of their rapid rise and subsequent challenges in recent years. We also briefly discuss the potential impact of the Covid-19 pandemic on the NBFC sector. Drawing lessons from the past, NBFCs need to be strengthened to play an important role in India's financial landscape.
    Keywords: Non-banking financial company, financial intermediation, financial regulation, systemic risk, liquidity crunch
    JEL: G01 G23 G28
    Date: 2022–06
  16. By: Ricardo Correa; Linda S. Goldberg; Robert Lerman; Bo Sun
    Abstract: The U.S. dollar has played a preeminent role in the global economy since the second World War. It is used as a reserve currency and the currency of denomination for a large fraction of global trade and financial transactions. The status of the U.S. dollar engenders important considerations for the effectiveness of U.S. policy instruments and the functioning of global financial markets. These considerations include understanding potential factors that may alter the dominance of the U.S. dollar in the future, such as changes in the macroeconomic and policy environments or the development of new technologies and payment systems.
    Keywords: dollar; international role; reserve currency
    JEL: F31 E42 F00
    Date: 2022–07–05
  17. By: Alessandro Danovi; Marzio Roma; Davide Meloni; Stefano Olgiati; Fernando Metelli
    Abstract: The goal of our 4-phase research project was to test if a machine-learning-based loan screening application (5D) could detect bad loans subject to the following constraints: a) utilize a minimal-optimal number of features unrelated to the credit history, gender, race or ethnicity of the borrower (BiMOPT features); b) comply with the European Banking Authority and EU Commission principles on trustworthy Artificial Intelligence (AI). All datasets have been anonymized and pseudoanonymized. In Phase 0 we selected a subset of 10 BiMOPT features out of a total of 84 features; in Phase I we trained 5D to detect bad loans in a historical dataset extracted from a mandatory report to the Bank of Italy consisting of 7,289 non-performing loans (NPLs) closed in the period 2010-2021; in Phase II we assessed the baseline performance of 5D on a distinct validation dataset consisting of an active portolio of 63,763 outstanding loans (performing and non-performing) for a total financed value of over EUR 11.5 billion as of December 31, 2021; in Phase III we will monitor the baseline performance for a period of 5 years (2023-27) to assess the prospective real-world bias-mitigation and performance of the 5D system and its utility in credit and fintech institutions. At baseline, 5D correctly detected 1,461 bad loans out of a total of 1,613 (Sensitivity = 0.91, Prevalence = 0.0253;, Positive Predictive Value = 0.19), and correctly classified 55,866 out of the other 62,150 exposures (Specificity = 0.90, Negative Predictive Value = 0.997). Our preliminary results support the hypothesis that Big Data & Advanced Analytics applications based on AI can mitigate bias and improve consumer protection in the loan screening process without compromising the efficacy of the credit risk assessment. Further validation is required to assess the prospective performance and utility of 5D in credit and fintech institutions.
    Date: 2022–06
  18. By: Kotovskaia, Anastasia; Meier, Nicola
    Abstract: Large technology firms ("BigTechs") increasingly extend their influence in finance, primarily taking over market shares in payment services. A further expansion of their businesses into the territory of cryptocurrencies could entail new and unprecedented risks for the future, namely for financial stability, competition in the private sector and monetary policy. When creating a regulatory toolbox to address these risks, financial regulatory, antitrust, and platform-specific solutions should be closely intertwined in order to fully absorb all the potential threats and to take account of the complex risks these platform companies bear. This policy letter evaluates the solutions lately proposed by the European Commission, with specific focus on the upcoming regulation of Markets in crypto-assets (MiCA), but also the Digital Markets Act (DMA) and Digital services act (DSA), against the background of cryptocurrencies issued by BigTechs and sheds light on financial regulatory, competition and monetary law issues coming along with the possible designs of these cryptocurrencies.
    Keywords: Cryptocurrencies,Big Techs,MiCA,DMA,DSA,European Commision
    Date: 2022
  19. By: Gallego, J. M; Paraje, G; Rodríguez-Lesmes, P
    Abstract: In recent decades, policy initiatives involving increases in the tobacco tax have increased pressure on budget allocations in poor households. In this study, we examine this issue in the context of the expansion of the social welfare state that has taken place over the last two decades in several emerging economies. This study explores the case of Colombia between 1997 and 2011. In this period, the budget share of the poorest expenditure quintile devoted to tobacco products of smoker’s households doubled. We analyse the differences between the poorest and richest quintiles in relation to the changes in budget shares, fixing a reference population over time to avoid demographic composition confounders. We find no evidence of crowding-out of education, or healthcare expenditures. This is likely to be the result of free universal access to health insurance and basic education for the poor. For higher income households, tobacco crowds-out expenditures on entertainment, leisure activities, and luxury expenditures. This finding should reassure policy-makers who are keen to impose tobacco taxes as an element of their public health policy
    Keywords: Tobacco expenditure; Poverty; Crowding out; Household expenditure;Health Inequalities
    Date: 2022–07–22
  20. By: Joshua S. Gans; Richard Holden
    Abstract: Blockchain consensus is a state whereby each node in a network agrees on the current state of the blockchain. Existing protocols achieve consensus via a contest or voting procedure to select one node as a dictator to propose new blocks. However, this procedure can still lead to potential attacks that make consensus harder to achieve or lead to coordination issues if multiple, competing chains (i.e., forks) are created with the potential that an untruthful fork might be selected. We explore the potential for mechanisms to be used to achieve consensus that are triggered when there is a dispute impeding consensus. Using the feature that nodes stake tokens in proof of stake (POS) protocols, we construct revelation mechanisms in which the unique (subgame perfect) equilibrium involves validating nodes propose truthful blocks using only the information that exists amongst all nodes. We construct operationally and computationally simple mechanisms under both Byzantine Fault Tolerance and a Longest Chain Rule, and discuss their robustness to attacks. Our perspective is that the use of simple mechanisms is an unexplored area of blockchain consensus and has the potential to mitigate known trade-offs and enhance scalability.
    Date: 2022–06
  21. By: Mnacho Echenim (LIG - Laboratoire d'Informatique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Emmanuel Gobet (CMAP - Centre de Mathématiques Appliquées - Ecole Polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique); Anne-Claire Maurice
    Abstract: We design a novel calibration procedure that is designed to handle the specific characteristics of options on cryptocurrency markets, namely large bid-ask spreads and the possibility of missing or incoherent prices in the considered data sets. We show that this calibration procedure is significantly more robust and accurate than the standard one based on trade and mid-prices.
    Keywords: implied volatility,calibration,bid-ask spread,missing data,data augmentation
    Date: 2022–07–06
  22. By: Hamed Nozari; Mohammad Ebrahim Sadeghi; Javid Ghahremani nahr; Seyyed Esmaeil Najafi
    Abstract: Over the past thirty years, logistics has undergone tremendous change from a purely operational performance that led to sales or production and focused on securing supply and delivery lines to customers, with the transformation of intelligent technologies into a professional operator. In today's world, the fourth generation of industry has forced companies to rethink how their supply chain is designed. In this case, in addition to the need for adaptation, supply chains also have the opportunity to reach operational horizons, use emerging digital supply chain business models, and transform the company into a digital supply chain. One of the transformational technologies that has had a tremendous impact on the supply chain in this regard is IoT technology. This technology, as one of the largest sources of data production, can facilitate supply chain processes in all its dimensions. However, due to the presence of the Internet and the location of supply chain components in the context of information networks, this digital supply chain always faces major challenges. Therefore, in this paper, an attempt was made to examine and prioritize the most important challenges of implementing a supply chain 0/4 using a nonlinear hierarchical analysis method. In order to investigate these challenges, the opinions of experts active in the supply chain of Fast-moving consumer goods industries (FMCG) were used as a case study as well as some academic experts.The results show that the lack of technological infrastructure and security challenges are the most important challenges of implementing supply chain 0/4 in the era of digital developments, which should be given special attention for a successful implementation.
    Date: 2022–06
  23. By: Ricardo Correa; Linda S. Goldberg; Robert Lerman; Bo Sun
    Abstract: The U.S. dollar has played a preeminent role in the global economy since the second World War. It is used as a reserve currency and the currency of denomination for a large fraction of global trade and financial transactions.
    Date: 2022–07–05
  24. By: Bhimani, Alnoor; Hausken, Kjell; Arif, Sameen
    Abstract: The adoption of cryptocurrencies is uneven across businesses, industries, and countries. Different forces drive cryptocurrency adoption (CA) dependent on the national level of development. We empirically assess the relationship between certain macro-national developmental indicators and cryptocurrency deployment across 137 countries. Linear regressions determine specific associations with cryptocurrency adoption. We report that CA correlates positively and in decreasing order with Education, the Human Development Index, the Network Readiness Index, the Gini index, Democracy, Regulatory Quality, and Gross Domestic Product, and negatively and in decreasing order with Control of Corruption, the Corruption Perception Index, and the Economic Freedom Index. We draw on our findings to point to policy implications tied to the usage of cryptocurrencies and blockchain technologies more widely and identify further research possibilities.
    Keywords: cryptocurrencies; blockchain; technology adoption; national development
    JEL: C50
    Date: 2022–08–01
  25. By: Ariane Tichit (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Corentin Elissée (CERDI - Centre d'Études et de Recherches sur le Développement International - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Frédéric Hayek (LIMOS - Laboratoire d'Informatique, de Modélisation et d'Optimisation des Systèmes - Ecole Nationale Supérieure des Mines de St Etienne - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne - INP Clermont Auvergne - Institut national polytechnique Clermont Auvergne - UCA - Université Clermont Auvergne); Pascal Lafourcade (LIMOS - Laboratoire d'Informatique, de Modélisation et d'Optimisation des Systèmes - Ecole Nationale Supérieure des Mines de St Etienne - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne - INP Clermont Auvergne - Institut national polytechnique Clermont Auvergne - UCA - Université Clermont Auvergne)
    Abstract: The process of dematerialization of local currencies and the rapid diffusion of the blockchain have generated a question: its application to local currencies. This article contributes to this reflexion. After having clarified what a blockchain really is, the advantages of its use and the illustration from concrete examples of its implementation, this research concludes that the adoption of such a technology would allow local currencies to gain security, confidence and options for the evolution of the project, even if its concrete implementation poses technical challenges.
    Abstract: Le processus de dématérialisation des monnaies locales et la diffusion rapide de la blockchain ont généré une question : celle de son application aux monnaies locales. C'est à cette réflexion que cet article contribue. Après avoir clarifié ce qu'est réellement une blockchain, les avantages de son utilisation et l'illustration à partir d'exemples concrets de son implémentation, cette recherche conclut que l'adoption d'une telle technologie permettrait aux monnaies locales de gagner au niveau de la sécurité, de la confiance et des options que cela ouvre en termes d'évolution du projet, même si sa mise en œuvre concrète pose des défis techniques.
    Keywords: Blockchain,Crypto-currencies,Local currency,Convergence
    Date: 2022–04–01
  26. By: J. Ignacio Conde-Ruiz; Juan José Ganuza
    Abstract: Estamos envueltos una auténtica revolución digital, donde el cambio tecnológico marcado por la nueva ola de automatización (gracias a los avances en la robótica), la conectividad y la inteligencia artificial van a cambiar la forma de producir, de vender, de consumir, de aprender e incluso de relacionarnos.
    Date: 2022–06
  27. By: Mohamed El Hamrani (LIREFIMO - Laboratoire Interdisciplinaire de Recherche en Economie, Finance et Management des Organisations - USMBA - Université Sidi Mohamed Ben Abdellah); Abderrazak El Hiri (LIREFIMO - Laboratoire Interdisciplinaire de Recherche en Economie, Finance et Management des Organisations - USMBA - Université Sidi Mohamed Ben Abdellah)
    Abstract: The objective of this work is to determine the impact of the evolution of the Bitcoin price on the values of other cryptocurrencies. It is, in fact, a question of describing the influence that the price of this famous digital asset can have on the values of other virtual currencies when it evolves up or down in a universe characterized by high volatility. For the achievement of this objective, and after having given a definition to what is called cryptocurrency and to the technological base on which it is based (blockchain), we present the main factors influencing the values of cryptocurrencies in general, and the price of Bitcoin in particular, knowing that the prices of these virtual assets are very volatile. Theoretically, it is considered that any change in the price of Bitcoin on the values of other cryptocurrencies does not have a synchronous but delayed effect. Reason for which we carry out an econometric application by the estimation of the models with distributed lags of which Bitcoin is an explanatory variable and the four main crypto-currencies which are Ethereum, Binance Coin, Cardano and Polcadot are variables to be explained representing the whole other crypto-currencies in circulation in the virtual world, with the exploitation of hourly data of the values of these five cryptocurrencies recorded for 31 days (744 observations). Thus, the presentation of the main evolutions that the Bitcoin price has experienced since its inception, the events that caused it and the econometric application carried out highlight this work and make it different from other previous works dealing with the similar topics.
    Abstract: L'objectif de ce travail est de déterminer l'impact de l'évolution du prix du Bitcoin sur les valeurs des autres cryptomonnaies. Il s'agit, en effet, de décrire l'influence que le prix de ce célèbre actif digital puisse avoir sur les valeurs des autres monnaies virtuelles quand il évolue à la hausse ou à la baisse dans un univers caractérisé par une forte volatilité. Pour la réalisation de cet objectif, et après avoir donné une définition à ce qu'on appelle cryptomonnaie et à la base technologique sur laquelle celle-ci est fondée (blockchain), nous présentons les principaux facteurs influençant les valeurs des cryptomonnaies en général, et le prix du Bitcoin en particulier, sachant que les prix de ces actifs virtuels sont très volatils. Théoriquement, il est considéré que tout changement du prix du Bitcoin sur les valeurs des autres cryptomonnaies n'a pas un effet synchrone, mais retardé. Raison pour laquelle nous procédons à une application économétrique par l'estimation des modèles à retards échelonnés dont Bitcoin est une variable explicative et les quatre principales cryptomonnaies qui sont Ethereum, Binance Coin, Cardano et Polcadot sont des variables à expliquer représentant l'ensemble des autres cryptomonnaies en circulation dans le monde virtuel, avec l'exploitation des données horaires des valeurs de ces cinq cryptomonnaies enregistrées pendant 31 jours (744 observations). Ainsi, la présentation des principales évolutions que le prix du Bitcoin ait connue depuis sa création, les événements qui l'ont causé et l'application économétrique effectuée mettent en valeur ce travail et le rend différent par rapport à d'autres travaux antérieurs traitants des sujets semblables.
    Keywords: Cryptocurrency,Blockchain,Bitcoin,econometric study,distributed lag model,Cryptomonnaie,étude économétrique,modèle à retards échelonnés
    Date: 2022
  28. By: Gradwohl, Ronen; Heller, Yuval; Hillman, Arye
    Abstract: We study the ability of a social media platform with a political agenda to influence voting outcomes. Our benchmark is Condorcet’s jury theorem, which states that the likelihood of a correct decision under majority voting increases with the number of voters. We show how information manipulation by a social media platform can overturn the jury theorem, thereby undermining democracy. We also show that sometimes the platform can do so only by providing information that is biased in the opposite direction of its preferred outcome. Finally, we compare manipulation of voting outcomes through social media to manipulation through traditional media.
    Keywords: Bayesian persuasion; Political agenda; Information manipulation; Condorcet Jury Theorem; Biased signals
    JEL: D72 D82 P16
    Date: 2022–06–30
  29. By: Pietro Cova (Bank of Italy); Alessandro Notarpietro (Bank of Italy); Patrizio Pagano; Massimiliano Pisani (Bank of Italy)
    Abstract: We assess the transmission of a monetary policy shock in a two-country New Keynesian model featuring a global private stablecoin and a central bank digital currency (CBDC). In the model, cash and digital currencies are imperfect substitutes that differ as to the liquidity services they provide. We find that in a digital-currency economy, where the stablecoin is a significant means of payment, the domestic and international macroeconomic effects of a monetary policy shock can be smaller or larger than in a (benchmark) mainly-cash economy, depending on how the assets backing the stablecoin supply respond to the shock. The benchmark transmission of the monetary policy shock can nonetheless substantially be restored in the digital-currency economy 1) if the stablecoin is fully backed by cash or 2) if the CBDC is a relevant means of payment.
    Keywords: digital currency, CBDC, monetary policy, international finance.
    JEL: E51 E52 F30
    Date: 2022–04
  30. By: John Nay
    Abstract: Climate adaptation could yield significant benefits. However, the uncertainty of which future climate scenarios will occur decreases the feasibility of proactively adapting. Climate adaptation projects could be underwritten by benefits paid for in the climate scenarios that each adaptation project is designed to address because other entities would like to hedge the financial risk of those scenarios. Because the return on investment is a function of the level of climate change, it is optimal for the adapting entity to finance adaptation with repayment as a function of the climate. It is also optimal for entities with more financial downside under a more extreme climate to serve as an investing counterparty because they can obtain higher than market rates of return when they need it most. In this way, parties proactively adapting would reduce the risk they over-prepare, while their investors would reduce the risk they under-prepare. This is superior to typical insurance because, by investing in climate-contingent mechanisms, investors are not merely financially hedging but also outright preventing physical damage, and therefore creating economic value. This coordinates capital through time and place according to parties' risk reduction capabilities and financial profiles, while also providing a diversifying investment return. Climate-contingent finance can be generalized to any situation where entities share exposure to a risk where they lack direct control over whether it occurs (e.g., climate change, or a natural pandemic), and one type of entity can take proactive actions to benefit from addressing the effects of the risk if it occurs (e.g., through innovating on crops that would do well under extreme climate change or vaccination technology that could address particular viruses) with funding from another type of entity that seeks a targeted return to ameliorate the downside.
    Date: 2022–07
  31. By: Dam, Duy Duc; Huynh, Cong Minh
    Abstract: This paper empirically studies factors influencing consumers’ purchase intention toward accommodation via lodging websites and their impact magnitudes in Binh Duong province of Vietnam. The results show that Lodging information (LI), Online lodging reviews (OR), Trust with the host (HT), Website usability (WU), and Perceived privacy and security (PS) significantly have positive impacts on consumers’ purchase intention (PI) toward accommodation via lodging websites for a sample size of 400 respondents in Binh Duong province. Remarkably, OR has the strongest impact on PI, followed by WU, PS, HT, and LI. However, Perceived lodging value (PV) and Perceived lodging price (PP) have insignificant impacts on PI. The findings provide marketers and practitioners with useful information for promoting purchase intention toward accommodation via lodging websites from the perspective of consumers in an emerging economy like Vietnam.
    Keywords: Lodging website, Purchase Intentions, Perceived value, Perceived price, Lodging information, Online reviews, Trust, Perceived privacy and security.
    JEL: D12 M10 M31
    Date: 2022–06–22
  32. By: Ronen Gradwohl; Yuval Heller; Arye Hillman
    Abstract: We study the ability of a social media platform with a political agenda to influence voting outcomes. Our benchmark is Condorcet's jury theorem, which states that the likelihood of a correct decision under majority voting increases with the number of voters. We show how information manipulation by a social media platform can overturn the jury theorem, thereby undermining democracy. We also show that sometimes the platform can do so only by providing information that is biased in the opposite direction of its preferred outcome. Finally, we compare manipulation of voting outcomes through social media to manipulation through traditional media.
    Date: 2022–06
  33. By: Ozili, Peterson K
    Abstract: This study investigates the behavior of bank non-performing loans in the Fintech era. Using data from 35 developed countries from 1998 to 2016, the findings show that non-performing loans are fewer in the second wave Fintech era. Also, bank non-performing loans are positively related to the state of the business cycle in the second wave Fintech era. Countries that have high supply of credit to the private sector experience high non-performing loans in the second wave Fintech era. The two-way interaction analysis show that non-performing loans are lower during times of economic boom and when there is higher credit supply in the second-wave Fintech era.
    Keywords: non-performing loan, financial innovation, disruptive technology, legal system, banks, Fintech, banks, credit risk, first wave Fintech era, second wave Fintech era.
    JEL: G21 M13
    Date: 2021–08–01
  34. By: Pavel Ciaian; Andrej Cupak; Pirmin Fessler; d'Artis Kancs
    Abstract: Individuals invest in Environmental-Social-Governance (ESG)-assets not only because of (higher) expected returns but also driven by ethical and social considerations. Less is known about ESG-conscious investor subjective beliefs about crypto-assets and how do these compare to traditional assets. Controversies surrounding the ESG footprint of certain crypto-asset classes - mainly on grounds of their energy-intensive crypto mining - offer a potentially informative object of inquiry. Leveraging a unique representative household finance survey for the Austrian population, we examine whether investors' ESG preferences can explain cross-sectional differences in individual portfolio exposure to crypto-assets. We find a strong association between investors' ESG preferences and the crypto-investment exposure. The ESG-conscious investor attention is higher for crypto-assets compared to traditional asset classes such as bonds and shares.
    Date: 2022–06
  35. By: Bottasso, Anna; Marocco, Paolo; Robbiano, Simone
    Abstract: We investigate the effects of Price Matching Guarantees (PMGs) commercial policies adopted by the US NewEgg online platform on prices of a representative sample of consumer electronics products. By applying a Difference-in-Differences (DiD) identification strategy, we find price reductions of about 3% occurring after the policy implementation. Moreover, we control for products characteristics recovered from User Generated Contents (UGCs) and perform heterogeneity analysis based on products appreciation and visibility. Estimates suggest that for high appreciated (and visible) products prices are higher during the policy validity period, while some specifications provide evidence in favour of price reductions occurring after the policy implementation for low appreciated and low visible goods. Results are consistent with the hypothesis that NewEgg’s PMGs policies can act as tools for price discrimination.
    Keywords: Price Matching Guarantees; Online Sales Platforms; User Generated Contents; Difference-in-Differences
    JEL: L11 L15 L20 L81
    Date: 2021–03
  36. By: Sonia Filipetto (Universidad Nacional General Sarmiento); Ariela Micha (Universidad Nacional General Sarmiento/CONICET); Francisca Pereyra (Universidad Nacional General Sarmiento); Cecilia Poggi (AFD); Martín Trombetta (Universidad Nacional General Sarmiento/CONICET)
    Abstract: The recent growth of the platform economy as a tool for labour exchanges has brought about concerns on the overall quality of jobs created. As labour platforms leave a digital trace, this paper assesses whether platforms can help to increase registered labour in contexts of extended informality as the one for Argentina, asking what does formalization via registration - if any - actually imply for workers and how do they perceive it. The article inspects three on-demand occupations in the Buenos Aires Metropolitan Area: private passengers’ transportation (Uber), domestic work (Zolvers) and home repair services (Home Solution). The main results show that platforms “formalization effect” is dependent on several factors: a platform’s business model, or the company’s interest and need to promote or encourage such process; the pre-existing occupational dynamics in terms of formalization; and general labour market conditions. In the context of an Argentine labour market harmed by a prolongued recession, most transitions to formality via the platform occur to previously unemployed workers who join them.
    Keywords: Digital platforms; Informality; Registration; Labour transitions; Decent work.
    JEL: O17 J46 J60
    Date: 2022–06
  37. By: Joël Cariolle (Fondation pour les Etudes et Recherches sur le Développement International (FERDI)); Yasmine Elkhateeb (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne and Cairo University); Mathilde Maurel (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, CNRS, FERDI)
    Abstract: This paper investigates the impact of internet use as a means of accessing news on African citizens' demand for and perception of the supply of democracy. This question is addressed using cross-sectional data from the last three rounds of the Afrobarometer survey for a sample of 25 African countries between 2011 and 2018. Using an instrumental variable approach to control for the possible endogeneity bias between internet use and citizens'perceptions, we found that using the internet to get news has a negative and significant effect on the demand for and on the perceived supply of democracy. The negative effect is channeled through two main factors. The first factor is the confidence in governments and governmental institutions, which is undermined by the use of the internet. In particular, we find that this internet-induced lower confidence translates into a higher probability of engaging in street protests instead of increased political participation. The second driving factor is the (mis-)information channel. On the one hand, we show that internet users' perception of the supply of democracy negatively diverges from experts' ratings. On the other hand, we document further that internet use increases the likelihood of incoherence in the respondent's stance about her demand for democracy. Finally, we show that the negative effect we found is mitigated when the internet is complemented by traditional media sources, especially the radio, to get informed. The findings of this study suggest that internet use is not neutral and tends to undermine citizens' preferences for democracy and alter perceptions about the functioning of political institutions
    Keywords: Internet news; democracy; Africa
    JEL: D72 D83 L86 P16
    Date: 2022–03

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.