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on Payment Systems and Financial Technology |
| By: | Ricci, Luca Antonio; Ahokpossi, Calixte; Belianska, Anna; khandelwal, khushboo; Lee, Sunwoo; Li, Bin Grace; Mu, Yibin; Quayyum, Saad; Nunez, Silvia Guadalupe; Ree, Jack Joo; Souto, Marcos Rietti; Simione, Felix |
| Abstract: | This paper reports key findings from the Sub-Saharan Africa Central Bank Digital Currency (CBDC) and Digital Payments Survey, shedding light on the motivations, benefits, and challenges of CBDC adoption, as well as the developments of digital private money and crypto assets in sub-Saharan Africa. It emphasizes the pivotal role of collaboration and shared knowledge in navigating the intricate landscape of digital currencies and assets in sub-Saharan Africa. As this evolving digital frontier is explored, the experiences and aspirations of the region’s central banks, as expressed in the survey, will help harness the potential for digital currencies, assets, and payments, and foster cooperation among countries in sub-Saharan Africa. A forthcoming IMF Departmental Paper will focus on key issues for countries in sub-Saharan Africa pertaining to CBDCs, private digital payments, and crypto assets. It will provide a deeper discussion of the benefits, costs, and risks of these digital payment systems and present policy options to enhance financial digital development and inclusion, while safeguarding macroeconomic and financial stability. |
| JEL: | E41 E42 E44 E58 G20 G21 G23 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19889 |
| By: | Jonathan Chiu; Cyril Monnet; Oliver Junye Xu |
| Abstract: | This paper develops a general equilibrium model to assess central bank digital currency (CBDC) design in a monetary system where traditional banks and “crypto banks” (i.e., banks that issue stablecoins) coexist. We compare tokenized and non-tokenized CBDC, showing that their desirability depends on the reliability of private money provision, the availability of collateral assets and the features of the crypto sector. Crucially, we show that the tokenization decision of CBDC matters for the equilibrium outcomes only when collateral use differs across sectors, identifying conditions under which tokenization is necessary to improve welfare. Tokenized CBDC can crowd out stablecoins and improve efficiency when crypto banks are not that trustworthy and crypto assets are scarce. Non-tokenized CBDC may be preferred when crypto transactions are less desirable or when reallocating reserves from traditional to crypto banks is beneficial. Our results highlight a trade-off between gains in payment efficiency and potential reductions in bank lending. These findings offer new policy insights on CBDC design under evolving financial conditions. |
| Keywords: | Money and payments, Digital assets and fintech, Payment and financial market infrastructures |
| JEL: | E50 E58 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-14 |
| By: | Youming Liu; Francisco Rivadeneyra; Edona Reshidi |
| Abstract: | We study competition between a welfare-maximizing public platform and a profit-maximizing private platform in a two-sided payment market. We characterize the public platform’s optimal pricing and show that it balances the benefits of increased competition against the welfare costs of network fragmentation. While introducing a public platform generally raises aggregate welfare and financial inclusion, the competing private platform may respond by raising its fees, disadvantaging merchants that continue to accept payments from the private platform. Finally, we show that cost-recovery and zero-fee mandates constrain public pricing, making welfare improvements uncertain and conditional on network effects, user switching behavior, and the degree of platform differentiation. |
| Keywords: | Money and payments, Digital assets and fintech, Payment and financial market infrastructures, Retail payments |
| JEL: | D4 E42 E58 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-10 |
| By: | Yuteng Cheng; Jonathan Chiu; Mohammad Davoodalhosseini; Janet Hua Jiang |
| Abstract: | We study the optimal design of a central bank digital currency (CBDC) in an economy where private payment service providers (PSPs) collect and monetize transaction data and may have market power. Payments data create social benefits through law enforcement and monitoring but also impose privacy costs and negative externalities by enabling profiling and surplus extraction. In our model, the central bank chooses CBDC fees, transaction rewards, and data-collection intensity, taking into account their effects on private payment adoption. We show that a data-collecting CBDC can either raise or lower private payment adoption and aggregate data production relative to cash, depending on the balance between PSP market power and the social costs of privately monetized data. In a calibration to the U.S. economy, the introduction of CBDC raises aggregate data collection, private PSP market share, and PSP profits. But when PSP competition is stronger, data are more valuable, or data-processing costs are lower, the optimal CBDC policy reduces aggregate data production if negative data externalities are sufficiently strong. |
| Keywords: | Money and payments, Digital assets and fintech, Payment and financial market infrastructures, Retail payments |
| JEL: | G2 L14 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-21 |
| By: | Christian Friedrich; Laura Zhao |
| Abstract: | In this paper, we examine the patterns and determinants of cross-border cryptocurrency flows. While our analysis focuses primarily on Bitcoin flows, the cryptocurrency with the largest market capitalization, we show that our key results also extend to four major stablecoins. After documenting global patterns of cross-border Bitcoin flows and contrasting them with those of traditional capital flows, we employ a cross-country panel approach to identify the key drivers of cross-border crypto flows for up to 162 countries. Our results provide evidence for the presence of multiple coexisting motives. The most significant motives comprise strategies to adjust to unfavorable macro and financial developments, as well as the need to conduct international payment and remittance transfers. Moreover, by conducting a case study of cross-border Bitcoin flows after the COVID-19 shock, we find that these motives were particularly relevant at a time when economic conditions were weak and the need for remittances appeared high. Gaining a better understanding of the motives behind cross-border cryptocurrency transactions is crucial for informing the public debate on cryptocurrencies and their potential use cases. |
| Keywords: | Money and payments, Digital assets and fintech |
| JEL: | E4 F3 F32 F38 F51 G15 G23 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-15 |
| By: | Aldasoro, Inaki; Cornelli, Giulio; Ferrari Minesso, Massimo; Gambacorta, Leonardo; Habib, Maurizio Michael |
| Abstract: | Using a new series of crypto shocks, we document that money market funds’ (MMF) assets under management, and traditional financial market variables more broadly, do not react to crypto shocks, whereas stablecoin market capitalization does. U.S. monetary policy shocks, in contrast, drive developments in both crypto and traditional markets. Crucially, the reaction of MMF assets and stablecoin market capitalization to monetary policy shocks is different: while prime-MMF assets rise after a monetary policy tightening, stablecoin market capitalization declines. In assessing the state of the stablecoin market, the risk-taking environment as dictated by monetary policy is much more consequential than flight-to-quality dynamics observed within stablecoins and MMFs. |
| Keywords: | Stablecoins; Cryptocurrency; Bitcoin; Monetary policy and shocks; Money market funds |
| JEL: | E50 F30 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19605 |
| By: | Arvind Magesan; Juan S. Morales; Arieda Muço |
| Abstract: | We study how legal threats to social media platforms shape online political communication. We exploit the sharp implementation of a 2020 Turkish law that required social media companies to establish local offices and provide user data to the government on request. Assembling a panel of over 700 Twitter users and 7 million posts, we use a differences-in-differences design to compare dissenters, individuals publicly critical of the reform when announced, to other groups unlikely to be affected, such as celebrities. We find that dissenters and political exiles post 15-20 percent fewer tweets following implementation, and engagement with their content falls sharply. These short-run chilling effects emerge despite limited platform compliance, indicating that anticipated enforcement risk, rather than actual enforcement, drives the effect. In the long run, the chilling effects dissipate. Our findings suggest that states can govern online speech indirectly, by regulating platforms rather than users, but that such effects may be self-limiting in the absence of visible enforcement. |
| Keywords: | online dissent, social media, internet regulation, chilling effects, self-censorship, digital repression |
| JEL: | D72 K24 L82 L86 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12873 |
| By: | Hongyu Xiao; Robert Petrunia; Sarah Lucky |
| Abstract: | We study the accessibility and competitive structure of Canadian retail banking and cash services in rural, localized markets using the Bresnahan-Reiss entry threshold framework. We estimate population thresholds required to support a given number of establishments in two segments of the financial industry: retail banking services (financial institution branches) and cash services (branches and ATMs). The first retail banking services branch requires about 500 residents in an average market, whereas the first cash services location requires about 80 residents. Our estimates indicate that retail banking-services markets become effectively competitive once three branches are present, whereas additional cash-service locations may be spatially differentiated for price-insensitive consumers. We also find meaningful regional heterogeneity: public banking is associated with greater access to retail banking services, while stricter regulatory requirements are associated with reduced access to cash services. |
| Keywords: | Financial system, Financial institutions and intermediation, Financial system regulation and oversight, Money and payments, Cash and bank notes |
| JEL: | D14 G21 L10 L13 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-19 |
| By: | Ndiaye, Abdoulaye |
| Abstract: | This paper investigates how pricing schemes can achieve efficient allocations in blockchain systems featuring multiple transaction queues under a global capacity constraint. I model a capacity-constrained blockchain where users submit transactions to different queues—each representing a submarket with unique demand characteristics—and decide to participate based on posted prices and expected delays. I find that revenue maximization tends to allocate capacity to the highest-paying queue, whereas welfare maximization generally serves all queues. Optimal relative pricing of different queues depends on factors such as market size, demand elasticity, and the balance between local and global congestion. My results have implications for the implementation of local congestion pricing for evolving blockchain architectures, including parallel transaction execution, directed acyclic graph (DAG)-based systems, and multiple concurrent proposers. |
| Keywords: | Blockchain; Fintech; Transactions; Parallel computing; Transaction costs; Consensus |
| JEL: | D47 D85 G23 G12 L86 O33 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19666 |
| By: | Lippi, Francesco; Moracci, Elia |
| Abstract: | We use a large granular dataset to analyze the households’ choice between cash and card payments. Empirically, both the size of the transaction and the amount of cash on hand emerge as significant covariates of the payment choice. We unveil a novel interaction between these two variables: the critical size for a card purchase depends on the amount of cash on hand. We present a tractable model of payment choices, featuring non-universal acceptance of cards by merchants, and a random expenditure flow. The model generates a precautionary motive for holding a cash buffer: cards are used to avoid “running out of cash†, accounting for the interaction discussed before. We employ a calibrated version of the model to quantify the benefits of card ownership, the welfare costs of imperfect card acceptance by merchants, and to identify conditions under which a cashless economy emerges. |
| JEL: | E41 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19752 |
| By: | Peitz, Martin; Sato, Susumu |
| Abstract: | We propose a tractable model of asymmetric platform oligopoly with logit demand in which users from two distinct groups are subject to within-group and cross-group network effects and decide which platform to join. We characterize the equilibrium when platforms manage user access by setting participation fees for each user group. We explore the effects of platform entry, a change of incumbent platforms’ quality under free entry, and the degree of compatibility. We show how the analysis can be extended to partial user participation. |
| Keywords: | Oligopoly theory; Aggregative games; Network effects; Two-sided markets; Two-sided single-homing; Entry |
| JEL: | L13 L41 D43 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19584 |
| By: | Anna Chernesky; Kim P. Huynh; Marcel C. Voia |
| Abstract: | Cross-country evidence finds that there are low levels of financial literacy. Financial literacy is often measured using the “Big Three” questions about interest rates, inflation, and risk. These questions are usually part of a longer survey. Respondents in long surveys may suffer survey fatigue and have lower quality responses. Therefore, the placement of the questions (and survey fatigue) may play a role in the results. We use a randomization of question placement to estimate the causal effect on financial literacy results. We find that when financial literacy questions are placed at the end of a survey, respondents are more likely to answer “Don’t know.” The increase in “Don’t know” responses comes largely at the expense of correct responses. We find that this leads to a drop in financial literacy by 5%-15%. This research suggests a measure of financial literacy that is adapted to account for survey length. |
| Keywords: | Models and tools, Econometric, statistical and computational methods, Money and payments, Cash and bank notes, Digital assets and fintech, Payment and financial market infrastructures, Retail payments |
| JEL: | C81 C83 D12 G53 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bca:bocawp:26-5 |
| By: | Rusakov, Alexey; Kretschmer, Tobias |
| Abstract: | First-party complements both create and capture value in platform markets. Which of these motives dominates depends on the platform’s competitive position on the user and the complementor side. We posit that platform owners release more first-party complements in product categories with a high share of users compared to competing platforms. Conversely, platform owners release more first-party complements if the platform is in a weak competitive position in terms of its complements. This suggests that platforms release first-party complements to create value if they are weak on the complementor side, and to capture value if they are strong on the user side. Using data from video game consoles, we find our hypotheses confirmed and integrate competition between platforms with competition between first-party and third-party complements. |
| JEL: | L82 L86 L22 L24 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19687 |
| By: | Motloutsi, Veronica; Viriri, Serestina; Samuels, Alexander |
| Abstract: | Digital transformation is widely presented as a pathway to financial inclusion, entrepreneurial growth, and sustainable development, yet its developmental effects remain uneven in emerging economies. This tension is particularly evident in South Africa’s fintech entrepreneurial ecosystem, where a relatively sophisticated financial sector and expanding digital innovation coexist with persistent inequality, skills shortages, fragmented institutional support, and regulatory complexity. Existing digital transformation research has largely focused on firm-level adoption, business model innovation, and technology-enabled change, offering limited explanation of how broader ecosystem conditions shape sustainable development outcomes in contexts such as South Africa. In response, this article develops a Critical Realist Digital Transformation Capacity Framework to explain how digital transformation may contribute to sustainable development within South Africa’s fintech entrepreneurial ecosystem. Drawing on digital transformation theory, capacity development theory, entrepreneurial ecosystem scholarship, and critical realism, the article argues that digital transformation is not a self-executing technological process but a contextually mediated and capacity-dependent phenomenon. It identifies institutional capacity, human capacity, and policy capacity as the key generative mechanisms through which digital technologies may support financial inclusion, ecosystem resilience, entrepreneurial participation, and broader economic development. By integrating these literatures, the article extends global information technology scholarship beyond technology-centric and firm-level accounts and offers an African-centred, mechanism-based explanation of digitally enabled development. The framework provides a conceptual foundation for future empirical research and a diagnostic lens for policymakers, regulators, and ecosystem actors in South Africa and other emerging-market settings. The study contributes to information systems theory by introducing Digital Transformation Capacity as a higher-order theoretical construct that explains how institutional, human, and policy capacities mediate the relationship between digital transformation and sustainable development. |
| Date: | 2026–07–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:87vbp_v2 |
| By: | Sanoh Yusuf (Graduate School of Economics, The University of Osaka) |
| Abstract: | This study investigates the causal impact of financial inclusion on household welfare in West Africa by analyzing consumption diversification using Living Standards Measurement Study (LSMS) data from the World Bank on 51, 851 households across seven countries of the West African Economic and Monetary Union (WAEMU). Instrumental Variables (IV) and Propensity Score Matching (PSM) were used for causal inference. The findings show that financial inclusion operates through distinct channels: it promotes food expenditure concentration via quality upgrading, expands non-food consumption into areas such as education and health, and induces structural reallocation from food to non-food budgets, with effects varying by financial modality. The results demonstrate that formal banking and microfinance drive long-term structural change. In contrast, mobile banking primarily facilitates short-term liquidity, offering targeted policy insights for enhancing financial inclusion strategies in the region. |
| Keywords: | Financial Inclusion, Theil entropy, consumption diversification, welfare, West Africa. |
| JEL: | G21 O16 I32 D12 O55 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:osk:wpaper:2610 |
| By: | Rachid Maghniwi (UM5 - Université mohamed 5, Rabat) |
| Abstract: | The rapid expansion of Open Banking in Morocco, accelerated by Bank Al-Maghrib regulatory frameworks and the digital transformation of financial services, creates systemic challenges for credit risk assessment across distributed banking networks. This paper proposes a federated learning (FL) architecture reinforced by differential privacy (DP) mechanisms for collaborative credit risk modelling in the Moroccan banking sector. The framework enables financial institutions to jointly train predictive models on distributed customer data without compromising individual privacy or violating data sovereignty constraints. Drawing on empirical data from a survey of 500 clients and 25 expert interviews conducted in the Rabat-Salé-Kénitra (RSK) region, we design a privacy-preserving gradient aggregation protocol adapted to the heterogeneous structures of Moroccan retail banking portfolios. Our federated model (FL-DP-AC) achieves an AUC-ROC of 0.847, representing a 14.3% improvement over centralised baselines, while maintaining a privacy budget (ε) of 1.2 under the Gaussian mechanism, meeting privacy thresholds imposed by Moroccan data protection law (Law No. 09-08). Results validate the feasibility of federated credit scoring as a secure and interoperable foundation for Open Banking ecosystems, and contribute a blueprint for AI-driven financial inclusion across the African banking sector. |
| Keywords: | Open Banking, machine learning, financial inclusion, Morocco, Bank Al-Maghrib, privacy-preserving AI, gradient aggregation, UTAUT, Moroccan banking sector, credit risk, differential privacy, federated learning, federated learning differential privacy credit risk Open Banking machine learning financial inclusion Morocco Bank Al-Maghrib privacy-preserving AI gradient aggregation UTAUT Moroccan banking sector |
| Date: | 2026–05–26 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05638586 |
| By: | Pandey, Aarni; Ganjoo, Ananta |
| Abstract: | The rapid proliferation of digital platforms has fundamentally disrupted the competitive landscape, exposing the structural inadequacies of traditional antitrust reforms that were designed for industrial-era markets. This paper examines the evolving intersection of antitrust law, technological advancement and innovation policy in the context of modern digital economies. Drawing on a comprehensive review of regulatory developments across major jurisdictions, including the United States, the European Union, China and India, the study analyses how legacy antitrust doctrines have struggled to address the complex characteristics of digital markets, including network effects, data-driven market power, zero-price services, and winner-takes-all dynamics. The paper identifies a critical tension at the heart of digital antitrust reform: the imperative to prevent monopolistic entrenchment by dominant gatekeepers, while simultaneously preserving the conditions for dynamic innovation that drives technological progress. Through an analysis of four core themes: the Regulation of Antitrust Laws in Digital Economies, Impact of Antitrust reforms on innovation, Evolution of Antitrust reforms with technological advancement and What adaptive regulation looks like, this paper constructs a multi-layered understanding of what antitrust reform looks like. The findings suggest that ex-ante regulatory instruments, such as the EU Digital Markets Act, represent a paradigm shift from reactive, litigation-based enforcement towards forward-looking structural obligations on designated gatekeepers. While such mechanisms offer greater predictability and speed, they also risk over-regulation and innovation deterrence if not calibrated with precision. The paper argues for a hybrid regulatory architecture, one that combines robust ex-ante obligations with flexible ex-post enforcement, interoperability standards, and evidence-based threshold criteria to achieve a sustainable equilibrium between competitive markets and an innovation-enabling environment. |
| Date: | 2026–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:lawarc:dk8sp_v1 |
| By: | Pitters, Julia; Seitz, Franz |
| Abstract: | The decline of cash used for transaction purposes as well as the increase in total currency in circulation is usually discussed with respect to cost, efficiency and technological progress, i.e. digitalization. A large literature estimates the costs of cash production, distribution and handling. By contrast, the societal value of cash remains far less investigated and rarely quantified. This asymmetry matters because policy debates that monetize costs but leave benefits unconsidered may undervalue a payment instrument. The paper establishes a composite indicator capturing cash's value to society across five key dimensions: resilience, privacy, inclusion, cost control, and competition-supplemented by consumer surplus from seigniorage. We apply the methodology to Germany but the framework is designed to be replicable across countries and to support more balanced government and central-bank policy analysis. It combines a representative consumer survey, expert interviews, macro data and interdisciplinary workshops. In the base calibration, the aggregate value equals around 1.2 % of GDP. These results suggest that policy evaluations should incorporate cash's multifaceted benefits alongside costs. Recognizing cash's broader societal role can guide central banks and policymakers in fostering balanced payment ecosystems that preserve both innovation and public redundancy. |
| Keywords: | cash value, public money, payment system, inclusion, privacy, resilience |
| JEL: | D12 E41 E42 E58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:imfswp:342551 |
| By: | Boris Hofmann; Aaron Mehrotra; Jan Paulick |
| Abstract: | The emergence of stablecoins has created a new channel to access US dollar liquidity in emerging market and developing economies (EMDEs), similar to the historical role of foreigncurrency deposits, or "deposit dollarisation". This has raised concerns about the possible implications for monetary control in EMDEs. Drawing on data on foreign currency deposits and dollar-pegged stablecoin inflows for more than 130 economies, we compare the dynamics and drivers of "stablecoin dollarisation" with those of conventional deposit dollarisation. We document that historical deposit dollarisation and recent stablecoin flows are both associated with similar macro-financial drivers, including the strength of exchange rate pass-through and sovereign or banking crises. We further document significant persistence in both deposit and stablecoin dollarisation, suggesting that dollarisation is hard to reverse once established. Unlike deposit dollarisation, stablecoin flows seem to be largely unaffected by either broad or specific capital flow restrictions. This likely occurs because stablecoins are partly circulating outside the regulatory perimeter. The historical record also suggests that moderate deposit dollarisation has been associated with somewhat higher inflation risks, although there is little evidence of significant impacts on monetary policy transmission. |
| Keywords: | dollarisation, capital flows, stablecoins, monetary control, EMDEs |
| JEL: | E44 E58 F32 F38 G15 G23 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1370 |
| By: | Bartram, Söhnke; Grinblatt, Mark; Xu, Yan |
| Abstract: | The relative restrictiveness of a central bank’s supply of money predicts the raw and risk-adjusted returns of its currency—both next month and at least three years into the future. Archived data, known by currency traders at the time, estimates central bank restrictiveness as a scaling of the residual from out-of-sample panel regressions of M1 on macroeconomic variables tied to domestic and international transaction requirements. Carry’s ability to forecast currency returns is subsumed by the central bank restrictiveness signal, which also forecasts inflation. |
| Keywords: | Money supply |
| JEL: | F31 G12 G15 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19881 |
| By: | Yaiza Cabedo; Mr. Tommaso Mancini-Griffoli; Fabian Schär; Nicolas Zhang |
| Abstract: | This paper examines how tokenization and distributed ledger technology may transform Financial Market Infrastructures (FMIs) by enabling smart contracts to perform a growing share of functions traditionally undertaken by central securities depositories, central counterparties, and trade repositories. It argues that while record-keeping, settlement, collateral management, and reporting can increasingly be executed on-chain, key functions requiring legal certainty, governance, accountability, and discretion remain institutional in nature. The analysis assesses which activities across issuance, clearing, settlement, and reporting can migrate to code, where limitations persist, and how risks evolve in tokenized environments. It finds that tokenization is more likely to reconfigure than eliminate FMIs, creating new efficiencies while introducing novel operational and governance risks. The most plausible outcome is a hybrid FMI model in which technology and institutions jointly provide the trust, resilience, and oversight required for financial stability. |
| Date: | 2026–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/136 |
| By: | Aditya Aladangady; Ricardo Duque Gabriel; Carlo Wix |
| Abstract: | We introduce a novel monthly county-level consumption dataset constructed from spending data on over 350 million credit cards in the Federal Reserve's Y-14M reports, covering over 3, 000 U.S. counties since 2014. We first show that the data closely approximate traditional consumption measures, explaining 92 percent of the variation in monthly adjusted personal consumption expenditures (PCE) growth at the national level and capturing meaningful cross-sectional variation in annual adjusted PCE growth at the state level. As a proof of concept, we use the county-month panel to estimate heterogeneous consumption responses to monetary policy shocks across the county-level income distribution, an analysis infeasible with traditional consumption data. We find that low-income counties exhibit larger spending declines than high-income counties, consistent with heterogeneous agent New Keynesian models. Finally, we provide practical guidance for researchers working with similar data, discussing coverage, sample composition, and the approximation of credit card spending from credit bureau data. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.08759 |
| By: | Copestake, Alexander; Furceri, Davide; Terracciano, Tammaro |
| Abstract: | We examine aggregate fluctuations in crypto markets and their relationship to global equity markets and US monetary policy. First, we document that changes in the correlation between crypto and global equity markets can be explained by changes in the participation of institutional investors in crypto markets. Second, we find that US monetary policy significantly affects crypto markets, but only when the participation of institutional investors is high. Finally, we rationalize our empirical results in a heterogeneous-agent model with time-varying aggregate risk aversion, in which large investors holding both asset classes create a direct link between them. |
| Keywords: | US monetary policy shocks |
| JEL: | E42 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19810 |
| By: | Barwick, Panle; Chen, Siyu; Fu, Chao; Li, Teng |
| Abstract: | Concerns about excessive mobile phone use among youth are mounting. We present estimates of both behavioral and contextual peer effects, along with comprehensive evidence on how students' own and their peers' app usage affect academic performance, physical health, and labor market outcomes. Our analysis draws on administrative data from a Chinese university covering three student cohorts over four years. We exploit random roommate assignments, differential exposure to a policy shock (gaming restrictions for minors), and differential exposure to a discrete event (the introduction of a blockbuster video game) for identification. App usage is contagious: a one s.d. increase in roommates' in-college app usage raises own usage by 5.8%. High app usage is harmful across all measured outcomes. A one s.d. increase in app usage reduces GPAs by 36.2% of a within-cohort-major s.d. and lowers wages by 2.3%. Roommates' app usage reduces a student's GPAs and wages through both disruptions and behavioral spillovers, generating a total negative effect that exceeds half the magnitude of the impact from the student's own app usage. Extending China's three-hour-per-week gaming restriction for minors to college students would boost their initial wages by 0.9%. High-frequency GPS and app usage data show that heavy app users spend less time in study halls, are more frequently late or absent from class, and get less sleep. |
| JEL: | E24 D91 I23 L82 L86 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19579 |
| By: | ~, Imelda; Abatayo, Anna Lou; Resusodarmo, Budy |
| Abstract: | The timing of payment can enhance salience, making customers more price-responsive when paying before consumption rather than after. This study examines Indonesia's nationwide switch to prepaid electricity metering, impacting over 40 million households. We find that prepaid metering users are twice as price-elastic as postpaid users. We also find a positive willingness to pay for prepaid metering, suggesting consumer welfare gains. As prices rise, prepaid metering reduces excess burden by 1.5% and CO2 emissions by nearly 6%. These findings suggest prepaid meters can support climate policy goals by promoting energy conservation without imposing significant burdens on consumers. |
| Keywords: | prepayment |
| JEL: | Q41 Q48 I30 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19778 |
| By: | David M. Rothschild; Nicole Immorlica; Brendan Lucier; Markus Mobius; Aleksandrs Slivkins |
| Abstract: | Digital search is undergoing a fundamental transformation from a human-driven process of discovery to an agent-mediated system of delegated decision-making. In the traditional model of digital search, users translate intent into keyword-based queries, evaluate ranked lists of links, and execute decisions outside the search interface. In an AI-native world, users express goals in natural language, agents interpret these intentions, and outcomes are returned as recommendations or executed decisions. This shift moves search from a link-based user interface to an embedded system component, with implications for transparency, competition, and monetization. The resulting system design problem raises key questions about information quality and access, trust, incentive alignment, and market structure. Early evidence from experimental agent-mediated marketplaces and economic theory suggests that small design choices, such as how stakeholders access information, how options are surfaced, and how actions are executed, have first-order effects on efficiency, competition, and the welfare of consumers and firms. We propose that the future of search will be determined not by incremental improvements in ranking algorithms and natural-language interfaces, but by the design of open, transparent, and competitive agentic systems that govern how decisions are made and how markets operate, highlighting a set of grand challenges at the intersection of AI, economics, and system design. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.21459 |
| By: | Prashanth BS; Manoj Kumar; Ariful Hoque; Nasser Al Muraqab; Immanuel Azaad Moonesar; Udo Christian Braendle; Ananth Rao |
| Abstract: | The development of online banking has brought about an increase in fraudulent operations, which is a major problem for banks. This study delves into the urgent requirement for interpretable, scalable, and top-notch fraud detection systems by using TabNet, an adaptable deep learning framework, on a Kaggle dataset consisting of actual bank transactions in India. Maximizing operational risk management by improving the accuracy of transaction anomaly detection and ensuring regulatory compliance through transparent models is the goal. We utilize a supervised learning pipeline that incorporates the Synthetic Minority Oversampling Technique (SMOTE) to ensure that classes are balanced. Subsequently, we conduct thorough exploratory data analysis (EDA) to identify patterns of fraud, both during specific times and across behaviors. On this dataset, five different deep learning architectures are tested: DNN, GRU, LSTM, CNN1D, and TabNet. Assessment of predictive performance was carried out using a 3-fold cross-validation framework. With a ROC-AUC of 0.9739 and an accuracy of 97.39 %, TabNet considerably outperformed the competition. The method of sparse feature selection used improved interpretability, generalized better on tabular data, and produced fewer false positives and negatives. Critical insights for operational fraud detection systems and a contribution to the broader literature on explainable AI (XAI) in financial decision-making are offered by the findings. Goals 8 and 16 of the Sustainable Development Agenda are supported by this study, which promotes inclusive economic growth and institutional transparency. Supporting strong, policy-compliant, and interpretable decision-support systems, it also offers practical use for real-time implementation in banking infrastructure. |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2607.18616 |
| By: | Steiner, Julia |
| Abstract: | Saxony’s Kassenbillets (1772–1873) are widely referred to as Germany's first ‘successful’ paper money, yet no systematic analysis has examined what made them successful. This paper challenges this consensus by testing whether Kassenbillets could practically be used to cover essential purchases across different income groups. Using a historical consumer price index for Leipzig and Dresden (1763–1803) and wage data, the analysis compares the cost of annual consumption baskets against income levels and evaluates whether Kassenbillets aligned with actual purchasing patterns. Three critical problems limited their use as everyday currency: extreme price volatility with the consumer price index (212.81% increase); structural insufficiency of wages with 26.09% of incomes falling below basic consumption costs; and systematic exclusion of lower income groups, as 57.33% of wages fell below one Taler weekly, making even the smallest denomination impractical. Contemporary sources recognised that the average income was 50 Taler annually, yet authorities introduced one Taler as the smallest denomination, effectively designing a financial instrument inaccessible to most. While Kassenbillets were designed to support state debt financing, they failed as a medium of exchange for the broader population, demonstrating that monetary innovations can serve elite interests whilst excluding the wider population. |
| Keywords: | monetary history;paper money;financial history;public finance;German history |
| JEL: | N0 F3 G3 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:wpaper:140541 |
| By: | Haibo Li; Estelle X Liu; Yinqiu Lu; Anne Oeking |
| Abstract: | This paper explores how demographic shifts, particularly population aging, are reshaping banking in Asia-Pacific’s bank-dominated financial systems. Using household surveys as well as bank-level and country-level panel data, we show that aging populations are associated, with shifts in bank portfolios away from traditional loans (with lower loan-to-deposit and loan-to-asset ratios), driven by changes in households’ financial behavior. These changes affect banks’ funding structures, profitability, and risk profiles, with implications for financial stability. We also provide new evidence on cross-border dynamics, showing that demographic divergence spurs asset reallocation toward younger economies. Our findings highlight evolving risks and supervisory challenges as demographic transitions unfold unevenly across economies. |
| Keywords: | Population aging; demographic change; bank balance sheets; household financial behavior; cross-border asset allocation |
| Date: | 2026–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/150 |
| By: | Doshi, Samir; Hoolohan, Vicky; Lewis, Tabitha; Schneebacher, Jakob |
| Abstract: | Accurate market definitions are important for competition agencies, but traditional survey based measures are costly, time-consuming and noisy at low aggregations. This paper explores the use of consumer card spending data to improve the timeliness and accuracy of retail market estimates. With the help of a standard machine-learning algorithm, we cluster spending flows from cardholder postcode sectors to merchant postcode sectors for detailed categories of retail merchants in the UK at a monthly frequency. To decide the thresholds for the clustering algorithm, we use estimates of average distance travelled from traditional survey tools. We find geographical retail markets that differ systematically by merchant good category and across space. Market size is also predicted by demographic and economic characteristics. Over time, market size is relatively stable but shrinks during periods of pandemic-induced travel restrictions. Markets for different retail goods are spatially correlated in predictable ways. Beyond applications to competition agency casework, this method allows researchers to investigate local competition and the impact of technology and government policies on spatial consumer search and purchasing behaviour. |
| Keywords: | market definitions; consumer behaviour; real-time data; economic data science |
| JEL: | D40 L10 L81 R12 |
| Date: | 2024–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:eoe:escoed:escoe-dp-2024-16 |