Online Appendix to the article by Robert M. Townsend (2019), "Distributed Ledgers: Innovation and Regulation in Financial Infrastructure and Payment Systems." This appendix contains links to the literature underpinning the model used in the paper.
Statement of Cash Flow and Financial Accounts: What are the accounts, how to create them, where they can be used
- Samphantharak, Krislert and Robert M. Townsend. 2009. Households as Corporate Firms: An Analysis of Household Finance Using Integrated Constructing Financial Statements from Integrated Household Surveys and Corporate Financial Accounting. Cambridge University Press.
- Paweenawat, Archawa, and Robert M. Townsend. 2018. “The Impact of Regional Isolationism: Disentangling Real and Financial Factors,” Working Paper, MIT.
e-Transfers, e-Messages: Predominant use of paper currency in Thailand, contrasted with M-Pesa for Kenya
- Alvarez, Fernando, Anan Pawasutipaisit, and Robert M. Townsend. 2018. “Cash Management in Village Thailand: Positive and Normative Implications.” Working Paper, MIT (presentation slides).
- Jack, William, Tavneet Suri, and Robert M. Townsend. 2010. “Monetary Theory and Electronic Money: Reflections on the Kenyan Experience.” Economic Quarterly 96 (1): 83–122.
Contracts, Mechanism Design: Some basics, first principles
- Harris, Milton and Robert M. Townsend. 1981. “Resource Allocation Under Asymmetric Information.” Econometrica 49 (1): 33-64.
Costly State Verification
- Townsend, Robert M. 1979. “Optimal contracts and competitive markets with costly state verification.” Journal of Economic Theory 21 (2): 265-293
Limited Commitment, Punishment
- Lehnert, Andreas, Ethan Ligon and Robert M. Townsend. 1999. “Liquidity Constraints and Incentive Contracts.” Macroeconomic Dynamics 3 (1): 1-47.
- Kilenthong, Weerachart T. and Robert M. Townsend. 2021. “A Market Based Solution for Fire Sales and Other Pecuniary Externalities.” Journal of Political Economy, 129 (4): 981–1010.
Moral Hazard
- Prescott, Edward C. and Robert M. Townsend. 1984a. “Pareto Optima and Competitive Equilibria with Adverse Selection and Moral Hazard.” Econometrica 52 (1), 21–45.
Market Design and Regulation of Financial Infrastructure: Implemented as smart contracts
- Townsend, Robert M. 1982. “Optimal Multiperiod Contracts and the Gain from Enduring Relationships under Private Information.” Journal of Political Economy 90.6: 1166-1186.
- Phelan, Christopher and Robert M. Townsend. 1991. “Computing Multiperiod Information Constrained Optima.” Review of Economic Studies 58 (5): 853-883.
- Karaivanov, Alexander, and Robert M Townsend. 2014. “Dynamic Financial Constraints: Distinguishing Mechanism Design from Exogenously Incomplete Regimes.” Econometrica 82 (3): 887-959.
- Townsend, Robert M. 1988. “Information Constrained Insurance: The Revelation Principle Extended.” Journal of Monetary Economics 21 (2/3): 411-450.
Building Financial Infrastructure: Background, what is on the ground from Townsend Thai project, and mixed impact of interventions
- Townsend, Robert M. 2016. “Village and Larger Economies: The Theory and Measurement of the Townsend Thai Project.” Journal of Economic Perspectives 30 (4):199-220.
- Chiappori, Pierre-André, Krislert Samphantharak, Sam Schulhofer-Wohl, and Robert M. Townsend. 2014. “Heterogeneity and Risk Sharing in Village Economies.” Quantitative Economics 5(1):1-27.
- Sripakdeevong, Parit and Robert M. Townsend. 2019. “The Village Money Market Revealed: Credit chains and shadow banking.” Working paper, MIT
- Kinnan, Cynthia, and Robert Townsend. 2012. "Kinship and Financial Networks, Formal Financial Access, and Risk Reduction." American Economic Review, 102 (3): 289-93.
- Samphantharak, Krislert, and Robert M. Townsend. 2018. “Risk and Return in Village Economies.” American Economic Journal-Microeconomics 10 (1): 1-40.
Building Financial Infrastructure: Interventions, impact and mechanisms
- Kaboski, Joseph P. and Robert M. Townsend. 2011. “A Structural Evaluation of Large-Scale Quasi-experimental Microfinance Initiative.” Econometrica 79 (5):1357-1406.
- Kaboski, Joseph P. and Townsend Robert M. 2012. “The Impact of Credit on Village Economies.” American Economic Journal: Applied Economics 4 (2):98-133.
- Banerjee, Abhijit, Emily Breza, Robert M. Townsend and Diego Vera-Cossio. 2018. “Access to Credit and Productivity: Evidence from Thai Villages.” Working paper, University of California, San Diego.
Building Financial Infrastructure: General equilibrium perspective
- Xandri, Juan Pablo. 2010. “Notes on "Perfect Competition, the Profit Criterion, and the Organization of Economic Activity" by Louis Makowski (1980)”
- Xandri, Juan Pablo. 2010. "Notes on "Financial Innovation in a General Equilibrium Model" by Wolfgang Pesendorfer (1995)"
- Townsend, Robert, and Juan Pablo Xandri. 2018. “Regulation and the Optimal Design of Financial Markets.” Working paper, MIT (presentation slides).
Design of Improved Payment Systems
- Townsend, Robert M. 1987. “Economic Organization with Limited Communication.” American Economic Review 77 (5): 954-971.
Regulating Payments Systems: Coordination and impossibility of decentralized exchange
- Townsend, Robert M. and Neil Wallace. 1987. “Circulating Private Debt: An Example with a Coordination Problem” in Contractual Arrangements for Intertemporal Trade edited by Edward C. Prescott and Neil Wallace. Minneapolis, MN: University of Minnesota Press.
Crypto Currency: What is money
- Lim, Youngjae and Robert M. Townsend. 1998. “General Equilibrium Models of Financial Systems: Theory and Measurement in Village Economies.” Review of Economic Dynamics 1 (1): 59-118.
- Amberg, Niklas, Tor Jacobson, Erik von Schedvin, and Robert M. Townsend. 2016. “Curbing Shocks to Corporate Liquidity: The Role of Trade Credit.” NBER Working Paper No. 22286.
Insights from Mechanism Design
- Doepke, Matthias and Robert M. Townsend. 2006. “Dynamic Mechanism Design with Hidden Income and Hidden Actions.” Journal of Economic Theory, 126 (1): 235-285.
Lessons from Monetary Theory for Value and Bubbles
- Townsend, Robert M. 1980. “Models of Money with Spatially Separated Agents.” In Models of Monetary Economies, edited by John Kareken and Neil Wallace. Federal Reserve Bank of Minneapolis: 265-303.
Optimal Activist Policy
- Townsend, Robert M. 1989. “Currency and Credit in a Private Information Economy.” Journal of Political Economy 97 (6):1323-1344.
- Chandrasekhar, Arun G., Robert M. Townsend, and Juan Pablo Xandri. 2018. “Financial Centrality and Liquidity Provision.” Working paper, MIT.