In his presentation in Madrid, Spain in April 2017, Bob Chakravorti discussed how the financial sector is rapidly changing because of new products and services brought to market by FinTech firms. Specifically, he discusses certain market segments where new entrants are reducing market frictions. He puts forth how incumbent financial...
In his testimony, Bob Chakravorti elaborated on the following areas: first, the state of the economic literature on the costs and benefits of capital regulation; second, the enormous changes that we have seen post-crisis in the bank capital regulatory landscape and the ensuing changes to the quality and quantity of...
Baumann, Chakravorti, and Shaaya identify and summarize the recent academic and industry literature on the benefits of large banks from the perspective of economies of scale and scope along with the benefits of a large, diverse set of products and services provided by a large bank. Second, they explore how...
Bob Chakravorti discusses surcharging and honor-all-cards rules for payment cards. Generally, merchants charge the same price regardless of the type of payment instrument used to make purchases. In many jurisdictions, merchants are not allowed to add a surcharge for payment card transactions because of legal (some states in the U.S...
While payment card usage has increased dramatically, the stock of outstanding currency has not declined as rapidly. Amromin and Chakravorti analyze changes in cash demand for 13 advanced economies from 1988 to 2003 by separating cash into three denomination categories to disentangle its store of wealth and payment functions. Defining...
In his presentation to Bank of Mexico economists and payment experts, Chakravorti presented an update of economic models that consider various forms of regulation.
Bolt and Chakravorti study the ability of banks and merchants to influence the consumer's payment instrument choice. Consumers participate in payment card networks to insure themselves against three types of shocks - income, theft, and their merchant match. Merchants choose which payment instruments to accept based on their production costs...
Bolt and Chakravorti explain how a payment network operates. Having established the payment network framework, they discuss the costs and benefits of providing and using payment cards relative to various other types of payment instruments. Next, they review the key contributions to the theoretical payment card literature. They consider papers...
The key questions that Chakravorti asks in this book chapter are: (1) How is the payment system evolving? (2) What are the economic forces driving the adoption of new payment instruments? (3) Would recent developments in the payment system limit the central bank from conducting monetary policy? He argues that...
In this article, Chakravorti and Lubasi conclude that prepaid applications potentially provide a more cost-effective means to transfer funds when: 1) recipients of funds do not have transactions accounts; 2) disbursers of funds do not have access to the recipient’s transactions accounts, or 3) the disbursers of funds need to...