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on Payment Systems and Financial Technology |
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Issue of 2024‒08‒12
nineteen papers chosen by |
| By: | María del Carmen Dircio Palacios Macedo (Department of Economics, Universitat Jaume I, Castellón, Spain); Paula Cruz-García (Department of Economic Analysis, Universitat de Valencia, Spain); Fausto Hernández-Trillo (Center for Research and Teaching in Economics (CIDE), Mexico); Emili Tortosa-Ausina (IVIE, Valencia and IIDL and Department of Economics, Universitat Jaume I, Castellón, Spain) |
| Abstract: | Access to financial services is unequal around the world. In many countries, les than half of the population has an account at a financial institution, and this lack of access to finance is often a critical reason behind income inequality and uneven growth. This is the case of Mexico, where financial exclusion affects large shares of the population mainly in rural and poorer localities. This is an ongoing concern for policymakers, since it undermines socioeconomic opportunities for families and businesses alike, hampering economic growth and development. However, assessing the relevance of this issue requires a careful measurement of financial inclusion which, to date, has only been achieved to a limited extent. We contribute to the literature in this context by proposing a multivariate index of financial inclusion for Mexico, at the municipal level, for the period 2013–2021. This index covers several dimensions, including access, and usage. The results corroborate that a large proportion of the population is still unbanked, although it is unevenly distributed across the country. |
| Keywords: | composite indicator, financial inclusion, Mexican municipalities, Mexico |
| JEL: | G21 G23 G30 O16 R51 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:jau:wpaper:2024/06&r= |
| By: | Jose Aurazo; Farid Gasmi |
| Abstract: | Low financial inclusion and high labor informality are two major challenges in developing countries. Using Peruvian survey data from 2015-18, we explore the dynamic relationship between these two variables by examining how labor informality and movements between formal and informal jobs may affect the transition probabilities of financial inclusion. First, we find that becoming informally employed reduces the probability of entering the formal financial system by 8 percentage points (pp) and increases the likelihood of exiting from it by 9.3 pp. Relative to persistently informal workers, those who stay in formal jobs have a 9 pp higher probability of gaining access to bank accounts, and 12 pp lower probability of losing access. Workers who move into formal jobs are more likely to enter the formal financial system by 9.7 pp and less likely to exit from it by 7.1 pp. These results underscore the complementarity of formalizing the informal sector and expanding access to financial services. |
| Keywords: | financial inclusion, labor informality, transition probabilities, dynamic random-effect panel probit |
| JEL: | C23 D14 E26 I31 O17 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1200&r= |
| By: | Kevin Riehl; Anastasios Kouvelas; Michail Makridis |
| Abstract: | City road infrastructure is a public good, and over-consumption by self-interested, rational individuals leads to traffic jams. Congestion pricing is effective in reducing demand to sustainable levels, but also controversial, as it introduces equity issues and systematically discriminates lower-income groups. Karma is a non-monetary, fair, and efficient resource allocation mechanism, that employs an artificial currency different from money, that incentivizes cooperation amongst selfish individuals, and achieves a balance between giving and taking. Where money does not do its job, Karma achieves socially more desirable resource allocations by being aligned with consumers' needs rather than their financial power. This work highlights the value proposition of Karma, gives guidance on important Karma mechanism design elements, and equips the reader with a useful software framework to model Karma economies and predict consumers' behaviour. A case study demonstrates the potential of this feasible alternative to money, without the burden of additional fees. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.05132&r= |
| By: | Peter N. Ireland (Boston College) |
| Abstract: | From the very start of its fifty-year history, the Shadow Open Market Committee advocated for a monetary policy strategy focused on controlling inflation. With time, the rationale for price stability as the principal focus of monetary policy came to be accepted more widely by academic economists and Federal Reserve officials as well. The SOMC also consistently favored an operational approach involving the use of the monetary base as the policy instrument and a broader monetary aggregate as an intermediate target. These features of SOMC strategy, by contrast, have never gained widespread support among academics or at the Fed. This paper outlines the SOMC’s preferred approach, focusing on how the Committee’s money- based strategy and arguments for it evolved over time. It then shows that these arguments still apply with force today. |
| Keywords: | Inflation, Money Growth, Monetary Policy, Monetarism, Shadow Open Market Committee |
| JEL: | B22 B31 E31 E51 E52 E58 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:boc:bocoec:1078&r= |
| By: | Liu, Na; Hou, Lingling |
| Keywords: | Environmental Economics And Policy, Resource/Energy Economics And Policy, Health Economics And Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343743&r= |
| By: | Ecker-Ehrhardt, Matthias |
| Abstract: | Communication professionals working for International Organizations (IOs) are important intermediaries of global governance that increasingly use social media to reach out to citizens directly. Social media pose new challenges for IO public communication, such as a highly competitive economy of attention and the fragmentation of audiences driven by networked curation of content and selective exposure. In this context, IO social media communication has to make tough choices about what to communicate and how, aggravating inherent conflicts of IO communication between comprehensive public information (aiming at institutional transparency) - and partisan political advocacy (aiming at normative change). If IOs choose advocacy, they might garner substantial resonance on social media. IO advocacy nevertheless fails to the extent that it fosters the polarized fragmentation of networked communication and undermines the credibility of IO communication as a source of trust - worthy information across polarized 'echo chambers'. The paper illustrates this argument through a quantitative content and social network analysis of X/Twitter communication on the Global Compact for Safe, Orderly, and Regular Migration (GCM). Remarkably, instead of facilitating cross-cluster communication ('building bridges'), United Nations accounts seem to have substantially fostered ideological fragmentation ('digging the trench') by their way of partisan retweeting, mentioning, and (hash)tagging. |
| Keywords: | international organizations, social media, public communication, echo chambers, advocacy, United Nations, Global Compact for Migration, content analysis, supervised machine learning, social network analysis |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:khkgcr:300240&r= |
| By: | Montag, Felix; Sagimuldina, Alina; Winter, Christoph |
| Abstract: | The widespread availability of digital technologies has made mandatory price disclosure policies (MPD) a convenient tool for policymakers to increase price transparency and foster competition. The literature has shown that these can increase or decrease prices. We shed light on the circumstances under which MPD lowers prices. We study the introduction of MPD in the German retail fuel market by combining a stylized theoretical model with detailed data on prices, seller characteristics and consumer information. We find that low levels of prior consumer information, a high number of sellers, and complementary information campaigns foster the procompetitive effects of MPD. |
| Keywords: | Mandatory price disclosure, consumer information, retail fuel market |
| JEL: | D83 L41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:300263&r= |
| By: | Daniyal Khan (Department of Economics, Mushtaq Ahmad Gurmani School of Humanities and Social Sciences, Lahore University of Management Sciences, Pakistan) |
| Abstract: | This paper interprets Pakistan’s monetary system through the lens of a Post Keynesian endogenous money model and argues that the 2022 amendment to the State Bank of Pakistan Act, 1956 has embedded the position of the State Bank of Pakistan (SBP) as an unusually and necessarily accommodationist central bank. On the one hand, this has practical implications. The inability of the Pakistani government to borrow from the SBP has robbed it of a key money creation mechanism and flooded the banking sector with sovereign risk. On the other hand, the replacement of the private sector by the government as the dominant source of credit demand presents an interesting theoretical case in which public credit demand becomes the source of endogenous money creation. |
| Keywords: | Money supply, central banking, financial fragility, State Bank of Pakistan, endogenous money |
| JEL: | E42 E51 E58 B52 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2411&r= |
| By: | Yu Zhang; Mostafa Chegeni; Claudio Tessone |
| Abstract: | The measurement of the velocity of money is still a significant topic. In this paper, we proposed a method to calculate the velocity of money by combining the holding-time distribution and lifespan distribution. By derivation, the velocity of money equals the holding-time distribution's value at zero. When we have much holding-time data, this problem can be converted to a regression problem. After a numeric simulation, we find that the calculating accuracy is high even if we used only a small part of the holding time data, which implies a potential application in measuring the velocity of money in reality, such as digital money. We also tested the methods on Cardano and found that the method can also provide a reasonable estimation of velocity in some cases. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.16587&r= |
| By: | Zerres, Christopher; Breyer-Mayländer, Thomas |
| Abstract: | Das vorliegende Arbeitspapier bietet einen umfassenden Überblick über aktuelle Statistiken zur Nutzung und zum Verhalten junger Social-Media-Nutzer in Deutschland. Ziel dieser Untersuchung ist es, tiefere Einblicke in die Art und Weise zu gewinnen, wie junge Menschen Social Media nutzen, wie kompetent sie im Umgang mit Social Media sind und welchen Einfluss die Social-Media-Nutzung auf ihr Leben hat. |
| Keywords: | Social Media, Statistik |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ouwpmm:300262&r= |
| By: | Xiang Hui; Tobias J. Klein; Konrad O. Stahl |
| Abstract: | Online ratings play an important role in many markets. However, how fast they can reveal seller types remains unclear. To study this question, we propose a new model in which a buyer learns about the seller’s type from previous ratings and her own experience and rates the seller if she learns enough. We derive two testable implications and verify them using administrative data from eBay. We also show that alternative explanations are unlikely to explain the observed patterns. After having validated the model in that way, we calibrate it to eBay data to quantify the speed of learning. We find that ratings can be very informative. After 25 transactions, the likelihood of correctly predicting the seller type is above 95 percent. |
| Keywords: | online markets, rating, reputation, Bayesian learning |
| JEL: | D83 L12 L13 L81 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11171&r= |
| By: | Jesper Kristensen; David Wender; Carl Anthony |
| Abstract: | The rapid advancements in artificial intelligence, big data analytics, and cloud computing have precipitated an unprecedented demand for computational resources. However, the current landscape of computational resource allocation is characterized by significant inefficiencies, including underutilization and price volatility. This paper addresses these challenges by introducing a novel global platform for the commodification of compute hours, termed the Global Compute Exchange (GCX) (Patent Pending). The GCX leverages blockchain technology and smart contracts to create a secure, transparent, and efficient marketplace for buying and selling computational power. The GCX is built in a layered fashion, comprising Market, App, Clearing, Risk Management, Exchange (Offchain), and Blockchain (Onchain) layers, each ensuring a robust and efficient operation. This platform aims to revolutionize the computational resource market by fostering a decentralized, efficient, and transparent ecosystem that ensures equitable access to computing power, stimulates innovation, and supports diverse user needs on a global scale. By transforming compute hours into a tradable commodity, the GCX seeks to optimize resource utilization, stabilize pricing, and democratize access to computational resources. This paper explores the technological infrastructure, market potential, and societal impact of the GCX, positioning it as a pioneering solution poised to drive the next wave of innovation in commodities and compute. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.19261&r= |
| By: | Clark, Harrison; Chen, Xuqi; Yenerall, Jackie |
| Keywords: | Food Consumption/Nutrition/Food Safety, Consumer/ Household Economics, Marketing |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343781&r= |
| By: | Stefan Craß; Alexander Eisl; Nedim Begic; Romana Polt |
| Abstract: | Die Studie untersucht die Potenziale und Herausforderungen von modernen Technologien im Bereich Lieferkettenverantwortung, mit einem besonderen Fokus auf Blockchains. Derartige Technologien bieten Dank der Dezentralität und der zugrundeliegenden kryptographischen Verfahren die Möglichkeiten, die entlang der Lieferkette anfallenden Informationen transparent, nachvollziehbar und unveränderbar zu speichern. Die mögliche Automatisierung von Prozessen erleichtert die Einhaltung der Lieferkettenverantwortung weiter. Gleichzeitig gibt es Herausforderungen, etwa bei den Datenschnittstellen und der Interoperabilität unterschiedlicher Lösungen. Hier könnten einheitliche Standards Abhilfe schaffen. In Österreich gibt es aktuell erst wenige Unternehmen, die sich erfolgreich mit dem Einsatz von Blockchain-Technologie im Bereich Lieferketten beschäftigen. Die Unterstützung von Unternehmen insbes. KMU) bei der Durchführung von Blockchain-Projekten könnte für Österreich Standort- und für die Unternehmen „Early Mover“-Vorteile generieren. |
| Date: | 2022–08 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:ecbook:y:2022:m:08:i:2022-006&r= |
| By: | Elie Bouri (Adnan Kassar School of Business, Lebanese American University, Lebanon); Matteo Foglia (Department of Economics and Finance, University of Bari “Aldo Moro†, Italy); Sayar Karmakar (Department of Statistics, University of Florida, USA); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa) |
| Abstract: | Based on the rationale that returns and volatility are interrelated, we apply a multilayer network framework involving the return layer and volatility layer of cryptocurrencies, NFTs, and DeFi assets over the period January 1, 2018 - January 23, 2024. The results show significant connectedness in each of the return and volatility layers, with major cryptocurrencies such as Bitcoin and Ethereum playing a central role. Large spikes in the level of connectedness are noticed around COVID-19 pandemic and Russia-Ukraine conflict, and Bitcoin and Ethereum emerge are net transmitters of returns and volatility shocks, emphasizing their significant role around these crisis periods. Notably, a strong positive rank correlation exists between the return and volatility layers, highlighting the significant risk-return relationship in the digital asset class. The findings suggest that economic actors should not ignore the interconnectedness between the return and volatility layers in the system of cryptocurrencies, NFTs, and DeFi assets for the sake of a comprehensive analysis of information flow. Otherwise, a share of the information flow concerning the return-volatility nexus across these digital assets would be missed, possibly leading to inferences regarding asset pricing, portfolio allocation, and risk management. |
| Keywords: | Multilayer networks, Spillover effects, return-volatility, cryptocurrencies, NFTs, DeFi, COVID-19, Russia-Ukraine conflict |
| JEL: | C32 G10 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202432&r= |
| By: | Darcy W. E. Allen; Jason Potts; Julian Waters-Lynch; Max Parasol |
| Abstract: | Decentralised Autonomous Organisations (DAOs) are a new type of digital organisation that uses blockchain infrastructure (e.g. smart contracts, tokens) to coordinate a group of people around a shared mission. Like all organisations, DAOs must attract sources of funding and other resources, and discover and retain a talented community and workforce. To do this, they must signal their true quality. Yet the characteristics of the environment that DAOs operate in (pseudonymous actors, global scale, permissionless entry and exit) makes this difficult. We apply costly signalling theory to explore the information asymmetry problem in DAOs and some of the strategies (behaviours and investments) and institutional solutions (including better signalling mechanisms) that have evolved to solve this problem. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.18457&r= |
| By: | Leonardo Madio; Martin Quinn |
| Abstract: | We study the incentive of an ad-funded social media platform to curb the presence of unsafe content that entails reputational risk to advertisers. We identify conditions for the platform not to moderate unsafe content and demonstrate how the optimal moderation policy depends on the risk the advertisers face. The platform is likely to under-moderate unsafe content relative to the socially desirable level when both advertisers and users have congruent preferences for unsafe content and to over-moderate unsafe content when advertisers have conflicting preferences for unsafe content. Finally, to mitigate negative externalities generated by unsafe content, we study the implications of a policy that mandates binding content moderation to online platforms and how the introduction of taxes on social media activity and social media platform competition can distort the platform’s moderation strategies. |
| Keywords: | advertising, content moderation, social media platforms, toxic content |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11169&r= |
| By: | Bin Khaled, Muhammad Nahian; Maredia, Mywish K. |
| Keywords: | International Development, Teaching/Communication/Extension/Profession, Research And Development/ Tech Change/Emerging Technologies |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea22:343777&r= |
| By: | Peng Yifeng; Gao Chen |
| Abstract: | This study proposes an innovative evaluation method based on large language models (LLMs) specifically designed to measure the digital transformation (DT) process of enterprises. By analyzing the annual reports of 4407 companies listed on the New York Stock Exchange and Nasdaq from 2005 to 2022, a comprehensive set of DT indicators was constructed. The findings revealed that DT significantly improves a company's financial performance, however, different digital technologies exhibit varying effects on financial performance. Specifically, blockchain technology has a relatively limited positive impact on financial performance. In addition, this study further discovered that DT can promote the growth of financial performance by enhancing operational efficiency and reducing costs. This study provides a novel DT evaluation tool for the academic community, while also expanding the application scope of generative artificial intelligence technology in economic research. |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2406.18440&r= |