@techreport{d6c0389e1036474890405b52809a491f,
title = "Money, E-money, and Consumer Welfare",
abstract = "We develop a micro-founded monetary model to inquire the role of a privately provided e-money instrument for household consumption smoothing and welfare. Different from fiat money, e-money users pay electronic transaction fees, but in turn e-money reduces spatial separation frictions and enables risk-sharing. We characterize the conditions that promotes e-money to be Pareto improving and the conditions when e-money reduces its users' welfare - despite for the consumption-smoothing it induces. We calibrate our model for the context of M-Pesa in Kenya and conduct a quantitative analysis. Since our quantitative analysis reveals a limited role for privately provided e-money, we recommend the optimality of e-money regulation.",
keywords = "E-money, M-Pesa, Risk-sharing, welfare, Monetary Policy",
author = "Francesco Carli and Burak Uras",
note = "CentER Discussion Paper Nr. 2022-032",
year = "2022",
month = dec,
day = "1",
language = "English",
volume = "2022-032",
series = "CentER Discussion Paper",
publisher = "CentER, Center for Economic Research",
type = "WorkingPaper",
institution = "CentER, Center for Economic Research",
}