Regionalized liquidity: A cross-country analysis of mobile money deployment and inflation in developing economies

Christina M. Qiu

World Development, 2022, vol. 152, issue C

Abstract: Mobile money has been hailed as a serious innovation in the pursuit of financial inclusion and poverty alleviation; however, its macroeconomic effect is not fully understood. This study presents a regional theory of inflation and argues that limited market integration contributes to mobile money’s inflationary effects. Household survey data from Kenya confirms increased use of mobile money after village- and supra-village-level shocks due to risk-sharing between liquidity-flexible and liquidity-constrained regions. A difference-in-differences empirical assessment indicates that mobile money deployment increases national consumer price indices. Findings support that the power to distribute equals the power to generate money supply in developing countries.

Keywords: Money supply; Quantity theory of money; Food price; Smallholder agriculture; Mobile money; Financial inclusion (search for similar items in EconPapers)
JEL-codes: E51 O16 O23 Q11 Q12 R1 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:152:y:2022:i:c:s0305750x2100396x

DOI: 10.1016/j.worlddev.2021.105781

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