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on Payment Systems and Financial Technology |
| By: | Joerg Bibow |
| Abstract: | For the past hundred years or more, payments have been primarily associated with banking, and banking as we know it today--being the result of many centuries of evolution--features a bundling of (at least) three main lines of business: lending, deposit-taking, and payment services. In the past 15 years or so, banks have come under severe competition as providers of payment services. Will "banking on payments" become outmoded and payments untethered from banking, or will payments still have a place in the future of banking? This paper sets out to explore this question and to address the following two related issues. First, what are the likely consequences (especially for the financing of growth and the provision of liquidity in the form of bank deposits) of the apparent "unbundling" of the traditional connections in banking between lending, deposit-taking, and payment services? Second, what are the implications of the evolution (or revolution) of money, payments, and banking for public policy, monetary theory, and the theory of monetary policy? |
| Keywords: | banking; money; payments; financial intermediation; bank regulation; monetary policy |
| JEL: | B22 E12 E42 E58 G21 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1091 |
| By: | Ferreira, Daniel |
| Abstract: | Research Question/Issue Blockchain technology promises to revolutionize governance through strong commitments, trustlessness, and transparency. This paper examines how these promises have failed to materialize in practice. Research Findings/Insights Drawing on case evidence from major blockchains, including Bitcoin and Ethereum, I argue that blockchains have evolved into technocracies where developers, foundations, and companies exercise disproportionate control. Rather than being exceptional, blockchain governance suffers from the same coordination problems, collective action failures, and centralization tendencies that plague traditional governance systems. Theoretical/Academic Implications The paper concludes that while blockchains offer valuable experiments in governance design, their alleged advantages over traditional institutions remain largely mythical. Practitioner/Policy Implications Blockchain organizations should acknowledge their reliance on off-chain coordination and informal authority. Investors must understand that blockchain governance depends on trusting technical elites, while regulators should recognize that decentralization claims often mask concentrated power structures requiring traditional oversight. |
| Keywords: | blockchain |
| JEL: | F3 G3 |
| Date: | 2025–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129788 |
| By: | David Argente (Yale University and NBER); Paula Gonzalez-Alvarez (Yale University); Esteban Méndez-Chacón (Department of Economic Research, Central Bank of Costa Rica); Diana Van Patten (Yale University and NBER) |
| Abstract: | Digital payment platforms can displace cash and extend financial services to underserved populations, yet many adults worldwide remain unbanked. Leveraging granular microdata on individual transactions and user characteristics, we argue that broad cash substitution via peer-to-peer (P2P) platforms depends on a “rapid low income-gradient”—the speed at which adoption spreads from affluent early users to lower-income groups. In three Latin American cases—Brazil’s Pix, Costa Rica’s Sinpe Movil, and Mexico’s CoDi—we document that low adoption costs, strong network effects, coordinated supply-side integration, and early awareness efforts enabled Pix and Sinpe Movil to reach nearly all income segments within five years, whereas CoDi remains characterized by low usage and predominantly high-income adopters. ***Resumen: Las plataformas de pagos digitales pueden reemplazar el uso de efectivo y ampliar el acceso a servicios financieros para poblaciones desatendidas; sin embargo, muchas personas en todo el mundo siguen estando excluidas del sistema financiero. A partir del análisis de transacciones y características de los usuarios, sostenemos que la sustitución generalizada del efectivo mediante plataformas de pago entre pares (P2P) depende de aplanar de manera rápida el gradiente respecto al ingreso: es decir, de la velocidad con la que la adopción se expande desde los primeros usuarios de altos ingresos hacia los grupos de menores ingresos. En tres casos de América Latina—Pix en Brasil, Sinpe Móvil en Costa Rica y CoDi en México—documentamos que los bajos costos de adopción, los fuertes efectos de red, la integración coordinada del lado de la oferta y los esfuerzos tempranos de divulgación permitieron que Pix y Sinpe Móvil alcanzaran a casi todos los segmentos de ingresos en un plazo de cinco años, mientras que CoDi continúa caracterizándose por un uso limitado y una adopción predominantemente entre personas de altos ingresos. |
| Keywords: | Technology Adoption; Peer-to-Peer Payments; Digital Payments; Adopción tecnológica; Pagos entre pares; Pagos digitales |
| JEL: | E4 E5 O1 O2 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:apk:doctra:2507 |
| By: | Stefano Comino (University of Udine, Italy); Alessandro Fedele (Free University of Bozen-Bolzano, Italy); Fabio Manenti (University of Padova, Italy) |
| Abstract: | This paper investigates the interplay between interoperability and the incentives to invest in cybersecurity in digital markets. We develop a two-sided symmetric duopoly model in which cyberattacks create a congestion-like externality, and interoperability amplifies hackers’ incentives to target connected platforms. We show that interoperability affects cybersecurity investment through multiple channels, potentially producing a non-linear relationship: low interoperability promotes risk-mitigation efforts, whereas high interoperability may discourage investment due to a public good effect. We then compare private and social incentives for interoperability, identifying potential sources of misalignment. Finally, we extend the baseline model to account for additional factors shaping the desirability of interoperability, including platforms’ business models, users’ awareness of cyber risk, market expansion effects, and asymmetries in user bases. |
| Keywords: | Cybersecurity, Interoperability, Congestion, Hackers, Two-sided Platforms, Investment. |
| JEL: | L13 L15 L51 L86 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bzn:wpaper:bemps116 |
| By: | Kingsley K. Arthur (Kumasi, Ghana); Simplice A. Asongu (Johannesburg, South Africa); Peter Darko (Kumasi, Ghana); Marvin O. Ansah (Kumasi, Ghana); Sampson Adom (Kumasi, Ghana); Omega Hlortu (Kumasi, Ghana) |
| Abstract: | The current review systematically synthesizes existing literature to provide a comprehensive overview of the nature of financial crimes in Africa and their impact on economic growth. We adopted the PRISMA protocol to identify 128 papers from the Scopus database; which were analyzed using MS Excel, VOS Viewer, and R-packages (Bibliometrix). The survey reveals that financial crimes are on the rise in Africa and have gained increasing concern over the years on the part of scholars, governments and NGOs. The survey also demonstrates that most of the financial crime in Africa emanates from illicit activities such as credit card fraud, cybercrime, mobile money fraud, financial statement fraud, Ponzi scheme, bribery and corruption, public fund mismanagement, terror financing, piracy, identity fraud, tax invasion, drug trafficking, product based-fraud, burglary, trade-based money laundering, sex marketing and gambling; with the majority occurring in specific regions like Western Africa, Southern Africa and Eastern Africa. Socio-political marginalization, poverty and unemployment, weak institutional and financial regulatory systems and individual selfish interests were the major causes. Overall, the content analysis of the studies indicates that financial crimes have significant negative impacts on the economic growth of the African continent. Implications for future research and practices have been discussed. |
| Keywords: | Financial crime, financial fraud, Money laundering, Africa, Economic development, Economic growth, and Bibliometric |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/022 |
| By: | Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | The purpose of the study is to assess if a policy of female inclusive education should be complemented with a policy of female ownership of bank accounts to fight female unemployment. The study therefore examines how female ownership of bank accounts moderates the incidence of female education on female unemployment. The focus is on 44 Sub-Saharan African (SSA) countries for the period 2004 to 2018 and the empirical evidence is based on interactive quantile regressions. The interactions are tailored such that female ownership of bank accounts influence the effect of female inclusive education on female unemployment. From the empirical findings, it is evident that female ownership of bank accounts does not effectively moderate female education in order to reduce female unemployment unless complementary policies are considered. The complementary policies should be in view of boosting the interaction between female education and female bank account ownership in increasing employment opportunities for the female gender and by extension, reducing female unemployment. The invalidity of the moderating effect is robust to the inclusion of more elements in the conditioning information set as well as accounting for other dimensions of endogeneity such as simultaneity and the unobserved heterogeneity. Policy implications are discussed. This study contributes to the extant literature by assessing how female ownership of bank accounts complement female inclusive education to reduce female unemployment. |
| Keywords: | Africa; Inequality; Gender; Inclusive development; Unemployment |
| JEL: | G20 I10 I32 O40 O55 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/026 |
| By: | Lala AlAsadi; Oluwasegun Bewaji; Aayush Gugnani; Tarush Gupta; Ronald Heijmans |
| Abstract: | This paper investigates the volatility dynamics of USD-backed stablecoins, challenging the assumption of inherent stability. Using a multi-level econometric framework, including GARCH, SVAR, and TVP-VAR models, we analyze how stablecoins respond to macro-financial shocks such as monetary policy changes, market uncertainty, and crypto volatility. Results show that USDC and TUSD are highly sensitive to external disturbances, while USDT and DAI remain relatively resilient. Stablecoins primarily absorb volatility but become more connected to systemic risk during crises. Frequency-domain analysis reveals short-term spillovers dominate during stress events, with long-term integration increasing post-2021. The findings highlight the heterogeneous nature of stablecoins and their growing ties to traditional finance, underscoring the need for tailored regulation and ongoing monitoring to mitigate systemic vulnerabilities. |
| Keywords: | stablecoins; volatility; financial markets; monetary policy |
| JEL: | F31 G14 E42 E58 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:dnb:dnbwpp:846 |
| By: | Theo C. Martins; Bernardo Ricca; Arthur Taburet |
| Abstract: | Using data on the universe of retail loans in Brazil, we show that universal de[1]fault is rare: when borrowers are in distress, they often repay one of their credit cards. Using a novel identification strategy, we estimate the causal impact of getting a new credit card on default. We also document that borrowers prioritize repaying the cards with higher limits, originated by fintech companies, or by lenders that also sold them other financial products. Motivated by these facts, we introduce the concept of informal seniority and develop a model of non-exclusive lending in which lenders compete for repayment priority using contract terms. Competition for loan seniority creates a debt-dilution problem; as a result, bankruptcy laws mandating equal recovery rates across all unsecured loans can reduce welfare. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bcb:wpaper:632 |
| By: | Hongzhe Wen |
| Abstract: | Digital Asset Treasury (DAT) companies, public firms that hold large crypto reserves as a core strategy, deliver levered exposure to digital assets but face acute downside risk when equity premia over net asset value multiples (mNAV) compress in bear markets. This paper develops a survival framework that couples conservative treasury policy with an operating line that monetizes holdings independent of mark-to-market gains. Using Strategy (formerly MicroStrategy) as a case, we propose a "BTC-to-sats" payments rail that allocates a small, risk-capped liquidity sleeve of the treasury to Lightning Network channels, generating price-agnostic fee revenue (acquiring bps, routing, hedge/FX spread) while keeping settlement exposure near zero beta to BTC. We formalize a no-forced-sale condition and show how disclosed KPIs allow investors to test whether operating cash flows can bridge an 18 to 24-month bear without liquidations. The feasibility of the rail is supported by Strategy's Lightning initiative and empirical Lightning performance. Our model generalizes across DAT types and provides implementable disclosures that can sustain an mNAV premium through cycles. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.01135 |
| By: | Ozili, Peterson K |
| Abstract: | The study investigates the macro determinants of global financial inclusion using world data from 1999 to 2023 period. The data were analysed using the fully modified ordinary least squares regression estimator, the two-stage least squares regression estimator and the robust least squares regression estimator. The determinants examined are total domestic investment, macroeconomic management frameworks, international trade openness, total population size, consumer spending, and economic growth rate. The findings reveal that population size and trade openness have a positive effect on global financial inclusion through a higher financial inclusion index and commercial bank branch expansion. Total domestic investment and sound macroeconomic management have a negative effect on global financial inclusion through a decrease in the financial inclusion index and a reduction in the number of bank branches and the negative effect is more pronounced in the post-financial crisis years. However, total population size remain a positive determinant of global financial inclusion in the post-financial crisis years. Trade openness and consumer spending increase global financial inclusion during periods of economic prosperity while total domestic investment and sound macroeconomic management decrease global financial inclusion during periods of economic prosperity. In terms of forward-looking orientation, the study finds that a large population and weak macroeconomic management in the present period leads to financial inclusion gains in the future. It is recommended that policy adjustments in today’s population size and macroeconomic management frameworks can help to achieve future financial inclusion targets. The findings contribute to the financial inclusion literature by using world data to offer new insights into the factors that can accelerate global financial inclusion. |
| Keywords: | financial inclusion, index, determinants, gross capital formation, trade openness, investment, population, global financial crisis, consumer spending, economic growth, regression |
| JEL: | E20 E32 G2 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126305 |
| By: | Jos\'e \'Angel Islas Anguiano; Andr\'es Garc\'ia-Medina |
| Abstract: | In this note, we compare Bitcoin trading performance using two machine learning models-Light Gradient Boosting Machine (LightGBM) and Long Short-Term Memory (LSTM)-and two technical analysis-based strategies: Exponential Moving Average (EMA) crossover and a combination of Moving Average Convergence/Divergence with the Average Directional Index (MACD+ADX). The objective is to evaluate how trading signals can be used to maximize profits in the Bitcoin market. This comparison was motivated by the U.S. Securities and Exchange Commission's (SEC) approval of the first spot Bitcoin exchange-traded funds (ETFs) on 2024-01-10. Our results show that the LSTM model achieved a cumulative return of approximately 65.23% in under a year, significantly outperforming LightGBM, the EMA and MACD+ADX strategies, as well as the baseline buy-and-hold. This study highlights the potential for deeper integration of machine learning and technical analysis in the rapidly evolving cryptocurrency landscape. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.00665 |
| By: | Imane Jalidy (USMBA - Université Sidi Mohamed Ben Abdellah, LIREFIMO - Laboratoire Interdisciplinaire de Recherche en Economie, Finance et Management des Organisations - FSJES-Fès - Faculté des sciences Juridiques, Economiques et Sociales de Fès); Abderrazak Elhiri (USMBA - Université Sidi Mohamed Ben Abdellah, LIREFIMO - Laboratoire Interdisciplinaire de Recherche en Economie, Finance et Management des Organisations - FSJES-Fès - Faculté des sciences Juridiques, Economiques et Sociales de Fès) |
| Abstract: | In the context of accelerated digital transformation in the financial sector, artificial intelligence (AI) has emerged as a crucial driver of FinTech growth, particularly in developing countries such as Morocco. The implementation of AI in financial services—including automated credit scoring, fraud detection, robo-advisory systems, and predictive analytics—offers promising opportunities for financial inclusion, operational efficiency, and expanded access to credit. However, this technological transition raises significant challenges in terms of governance, algorithm regulation, digital sovereignty, and data protection. This article aims to examine the conditions required for the emergence of a hybrid model of technological governance for financial AI in Morocco, one that balances innovation, inclusion, and security. The study adopts a qualitative methodology, combining an in-depth review of recent academic literature, institutional reports (World Bank, OECD, Bank Al-Maghrib), and international benchmarks (EU, Singapore, United Kingdom). It draws upon three complementary theoretical frameworks: adaptive regulation, institutional theory, and dynamic capabilities. Findings highlight Morocco's recent progress in building digital infrastructure and supporting FinTech initiatives, while also pointing out key limitations: institutional fragmentation, the absence of a dedicated legal framework for AI, a shortage of specialized talent, and technological dependency. In response, the article proposes a strategic roadmap structured around five key pillars: a robust legal framework, algorithmic supervision tools (SupTech), sovereign infrastructure, ethical AI governance, and capacity building. Ultimately, the article advocates for a proactive, context-sensitive, and inclusive governance model capable of supporting a sustainable digital transformation of Morocco's financial sector. |
| Abstract: | Dans le cadre d'une digitalisation accélérée du secteur financier, l'intelligence artificielle (IA) se révèle être un outil crucial pour la croissance des FinTechs, spécialement dans les pays en développement tels que le Maroc. L'implémentation de l'intelligence artificielle dans le secteur financier — y compris par le biais de scoring automatisé, la détection de fraudes, les robots-conseillers et l'analyse prédictive — offre des possibilités captivantes pour l'inclusion financière, l'efficacité opérationnelle et l'expansion de l'accès au crédit. Cependant, cette transition technologique pose d'importants défis en matière de gouvernance, de régulation des algorithmes, de souveraineté numérique et de protection des données personnelles. L'objectif de cet article est d'étudier les conditions nécessaires à l'émergence d'un modèle hybride de gouvernance technologique pour l'IA financière au Maroc, qui allie innovation, inclusion et sécurité. Il mobilise une méthode qualitative fondée sur l'analyse croisée de publications académiques récentes, de rapports institutionnels (Banque mondiale, OCDE, Bank Al-Maghrib) et d'exemples internationaux (UE, Singapour, Royaume-Uni). L'étude repose sur trois cadres théoriques : la régulation adaptative, la théorie institutionnelle et les capacités dynamiques. Les résultats mettent en évidence les avancées marocaines en matière d'infrastructures numériques et d'initiatives FinTech, tout en soulignant les limites actuelles : fragmentation institutionnelle, absence de cadre légal dédié à l'IA, déficit de compétences spécialisées, et dépendance technologique. L'article propose une feuille de route structurée autour de cinq axes stratégiques : cadre juridique, outils de supervision algorithmique (SupTech), infrastructures souveraines, éthique algorithmique et renforcement des compétences locales. Il plaide ainsi pour une gouvernance proactive, contextualisée et inclusive, capable d'accompagner durablement la transition numérique du secteur financier marocain. |
| Keywords: | Artificial intelligence, FinTech, Technological governance, Financial inclusion, Morocco, Intelligence artificielle, Maroc, Inclusion financière, Gouvernance technologique |
| Date: | 2025–10–26 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05333586 |
| By: | Yudi Yang; Fan Yang; Xiajie Yi; Dongwei He |
| Abstract: | This paper investigates the impact of financial technology (FinTech) on the financial sustainability (FS) of commercial banks. We employ a three-stage network DEA-Malmquist model to evaluate the FS performance of 104 Chinese commercial banks from 2015 to 2023. A two-way fixed effects model is utilized to examine the effects of FinTech on FS, revealing a significant negative relationship. Further mechanistic analysis indicates that FinTech primarily undermines FS by eroding banks' loan efficiency and profitability. Notably, banks with more patents or listed status demonstrate greater resilience to FinTech disruptions. These findings help banks identify external risks stemming from FinTech development, and by elucidating the mechanisms underlying FS, enhance their capacity to monitor and manage FS in the era of rapid FinTech advancement. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.02608 |
| By: | L. Randall Wray |
| Abstract: | Until Modern Money Theory came along, no one seemed to ask the question--let alone answer it--as to why the US government borrows, given that it can print money. For the past 28 years, we've been answering it in exhausting detail. But it remained a question no one wanted to consider. However, in recent days social media has been ablaze because Jared Bernstein, who is now chair of the US Council of Economic Advisers, appeared to stumble over that exact question in a promotional clip from the newly released documentary Finding the Money. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:lev:levyop:op_72 |
| By: | Daniele Maria Di Nosse; Federico Gatta; Fabrizio Lillo; Sebastian Jaimungal |
| Abstract: | Decentralized Exchanges (DEXs) are now a significant component of the financial world where billions of dollars are traded daily. Differently from traditional markets, which are typically based on Limit Order Books, DEXs typically work as Automated Market Makers, and, since the implementation of Uniswap v3, feature concentrated liquidity. By investigating the twenty-four most active pools in Uniswap v3 during 2023 and 2024, we empirically study how this structural change in the organization of the markets modifies the well-studied stylized facts of prices, liquidity, and order flow observed in traditional markets. We find a series of new statistical regularities in the distributions and cross-autocorrelation functions of these variables that we are able to associate either with the market structure (e.g., the execution of orders in blocks) or with the intense activity of Maximal Extractable Value searchers, such as Just-in-Time liquidity providers and sandwich attackers. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.22834 |
| By: | Gustavo Berganti\~nos; Juan D. Moreno-Ternero |
| Abstract: | We study the problem of measuring the popularity of artists in music streaming platforms and the ensuing methods to compensate them (from the revenues platforms raise by charging users). We uncover the space of popularity indices upon exploring the implications of several axioms capturing principles with normative appeal. As a result, we characterize several families of indices. Some of them are intimately connected to the Shapley value, the central tool in cooperative game theory. Our characterizations might help to address the rising concern in the music industry to explore new methods that reward artists more appropriately. We actually connect our families to the new royalties models, recently launched by Spotify and Deezer. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.25275 |
| By: | Xiufeng Li; Zefang Li |
| Abstract: | This paper explores the impact of manufacturers' overconfidence on their collaborative innovation with platforms in the Internet of Things (IoT) environment by constructing a game model. It is found that in both usage-based and revenue-sharing contracts, manufacturers' and platforms' innovation inputs, profit levels, and pricing strategies are significantly affected by the proportion of non-privacy-sensitive customers, and grow in tandem with the rise of this proportion. In usage-based contracts, moderate overconfidence incentivizes manufacturers to increase hardware innovation investment and improve overall supply chain revenues, but may cause platforms to reduce software innovation; under revenue-sharing contracts, overconfidence positively incentivizes hardware innovation and pricing more strongly, while platform software innovation varies nonlinearly depending on the share ratio. Comparing the differences in manufacturers' decisions with and without overconfidence suggests that moderate overconfidence can lead to supply chain Pareto improvements under a given contract. This paper provides new perspectives for understanding the complex interactions between manufacturers and platforms in IoT supply chains, as well as theoretical support and practical guidance for actual business decisions. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.01332 |
| By: | Anna L. Paulson |
| Abstract: | Philadelphia Fed President and CEO Anna Paulson welcomed participants to the 13th biennial New Perspectives on Consumer Behavior in Credit and Payments Conference today, celebrating 25 years of leadership in consumer credit and payments research. In her remarks, President Paulson reflected on the evolution of consumer finance, the Consumer Finance Institute’s expanding research portfolio, and the importance of understanding household financial behavior for economic policy and stability. |
| Date: | 2025–11–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpsp:102057 |
| By: | Alex Shamis; Matt Stephenson; Linfeng Zhou |
| Abstract: | Blockchains face inherent limitations when communicating outside their own ecosystem, largely due to the Byzantine Fault Tolerant (BFT) 3f+1 security model. Trusted Execution Environments (TEEs) are a promising mitigation because they allow a single trusted broker to interface securely with external systems. This paper develops a cost-of-collusion principal-agent model for compromising a TEE in a Data Center Execution Assurance design. The model isolates the main drivers of attack profitability: a K-of-n coordination threshold, independent detection risk q, heterogeneous per-member sanctions F_i, and a short-window flow prize (omega) proportional to the value secured (beta times V). We derive closed-form deterrence thresholds and a conservative design bound (V_safe) that make collusion unprofitable under transparent parameter choices. Calibrations based on time-advantaged arbitrage indicate that plausible TEE parameters can protect on the order of one trillion dollars in value. The analysis informs the design of TEE-BFT, a blockchain architecture that combines BFT consensus with near-stateless TEEs, distributed key generation, and on-chain attestation to maintain security when interacting with external systems. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.26091 |
| By: | Jacopo Timini |
| Abstract: | This paper reexamines the effects of the Latin Monetary Union (LMU) - a 19th century agreement among several European countries to standardize their currencies through a bimetallic system based on fixed gold and silver content - on trade. Unlike previous studies, this paper adopts the latest advances in gravity modeling and a more rigorous approach to defining the control group by accounting for the diversity of currency regimes during the early years of the LMU. My findings suggest that the LMU had a positive effect on trade between its members until the early 1870s, when bimetallism was still considered a viable monetary system. These effects then faded, converging to zero. Results are robust to the inclusion of additional potential confounders, the use of various samples spanning different countries and trade data sources, and alternative methodological choices. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.25487 |
| By: | L. Randall Wray |
| Abstract: | This is a revised version of the keynote address presented at the FDR library for the Levy Institute Summer Seminar on Money, Finance, and Public Policy on June 20th, 2025. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1084 |
| By: | Bakker, Gerben |
| Abstract: | We identify a previously underappreciated data revolution starting in the 1960s, in which business information firms adopted ICT very early on to automate market data sales. Before this ‘terminal revolution’, securities firms could barely cope with the paperwork of growing trading volumes, forcing the NYSE to close on Wednesdays to allow them to catch up. The terminal revolution placed computer screens on every client’s desk, changed how data was accessed and acted on, and created virtual trading floors, foreshadowing almost all stages the internet would go through some three decades later. We focus on early entrant Reuters and late entrant Bloomberg, which came to dominate global market data provision, discussing other firms along the way. We find that theory on sunk costs and market structure (Sutton, 1998) can explain how the exploding market remained highly concentrated, despite many new entrants. We also find that financial and business news (subject to Arrow’s paradox) was a complement to data (not subject to Arrow’s paradox), and barely profitable by itself: only firms offering both financial news and data tended to survive. |
| Keywords: | news agencies; financial and business news; business information; Arrow's fundamental paradox of information; trading data terminals; exchange rates; stock prices; bond prices; commodity prices; precursors to internet; industrialisation of services; ICT productivity impact; Kenneth J. Arrow; business history |
| JEL: | L82 L86 N20 N72 N74 N82 N84 O33 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129938 |