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 this book chapter, Chakravorti considers linkages between consumer payments and credit. Payors, those that make payments, and payees, those that receive payments, choose among various payment instruments based on their preferences toward convenience, risk, and cost. According to a recent U.S. survey, the usage of payment cards is increasing...
Chakravorti and Emmons model side payments in a competitive creditâcard market. If competitive retailers absorb the cost of accepting credit cards by charging a higher goods price to everyone, then someone must subsidize convenience users of credit cards to prevent them from defecting to merchants who do not accept cards...