The Rise of Mobile Money in Kenya: The Changing Landscape of M-PESA’s Impact on Financial Inclusion
By Hong Zhu
M-PESA, the hugely popular mobile money system in Kenya, has been celebrated for its potential to “bank the unbanked” and increase access to financial services. This paper provides evidence to support this idea and explores mechanisms through which this might be the case. It specifically looks at the savings products held by individuals and how this changes in relation to M-PESA use. It then constructs an index for measuring the extent to which individuals are integrated into the formal financial sector. This paper argues that M-PESA’s effect on financial inclusion is a growing phenomenon, which suggests that keeping pace with the rapid evolutions of this mobile money system should be a high priority for researchers. As this paper elucidates, M-PESA has become notably more integrated with the formal financial sector in 2013 as compared to 2009, which holds implications for user behavior.
Advisor: Michelle Connolly, Xiao Yu Wang | JEL Codes: D14, E42, G21, G23, O1, O17, O16, O33 | Tagged: Financial Inclusion, Mobile Money, Savings,Technology
The Economic Effects of Military and Non-Military Government Spending
By Patrick Royal
There has been substantial investigation into the influence of government spending in general on economic growth, unemployment, and inequality, but relatively little investigation into the relative effects of different types of spending. This thesis attempts to separate the influence of military and non-military government spending on the economy. As with many such investigations, it focuses on a single economy – that of the United States. The results indicate that, dollar for dollar, military spending is just as effective as non-military spending at affecting unemployment, but much more effective at promoting short-term growth. Neither type of spending has a strong impact on income inequality, suggesting that the primary determinants of that are not related to government spending.
Advisor: Craig Burnside | JEL Codes: E1, E12, E62 | Tagged: Government Spending, Growth, Military
Fiscal Multicointegration and Sustainability in OECD Economics
By Rajlakshmi De
Policies surrounding government expenditures and revenues are often concerned with the size of the national public debt and whether it is sustainable or unsustainable by employing the multi-cointegration framework and assertion corresponding criteria for sustainability. Denmark, Norway, Finland, Canada, Sweden, Portugal, and Austria are found to exhibit sustainable fiscal policies during the paper’s sample period, whereas the policies of the United States, Italy, France, Netherlands, United Kingdom, Spain, and Japan are determined to be unsustainable.
Advisor: Kent Kimbrough, Lori Leachman | JEL Codes: E6, E61, E62, E66 | Tagged: Fiscal, Multicointegration, Sustainability
Manufactured Housing Securitization
By Renan Cunha
Through prices of manufactured homes rose in the 2000’s, demand fell dramatically because of the boom in the stick-built housing market. One of the stated goals of securitization is to increase the supply of credit and decrease the cost of lending to make borrowing accessible to more homeowners. This paper will study the effect of securitization of manufactured home loans on the availability of credit for borrowers in North Carolina.
Advisor: Charles Becker | JEL Codes: E51, R3, R31 | Tagged: Credit Availability, Manufactured Housing, Securitization, Trailer Parks
The Hidden Costs of Central Bank Borrowing
By Shane Hunt
This paper explores a previously overlooked unintended consequence of a private bank accepting Central Bank loans as a lender of last resort. Applying the basic Markowitz Security Model, I explore the potential effect of a private bank accepting a Central Bank loan as a signal of increased risk of investment in that private bank to the private markets. Finding a possibility that private investors will charge a penalty risk premium for having sought Central Bank financing, I consider the effects of this premium in three different game theoretic scenarios, each with a different set of assumptions that could apply in different Economic settings. Depending on the specific environment, possible effects include dependence on Central Bank financing, bankruptcy, or an eventual return to the private financial markets for future funding.
Advisor: Marjorie McElroy, Nir Jaimovich | JEL Codes: E58, G02, G21, G28, G32 | Tagged: Banking, Central Banking, Finance
