BLUE SKY
This paper presents a philosophical understanding of the political-economy of markets and money as social contracts consisting of networks of contracts between individuals where the emergent technology that functions as money is defined by this network of contracts. At the core of this emergent nature of money are the basic legal concepts of contract law. By breaking markets and money down to their underlying contract law foundations, the paper illustrates fundamental implications for what constitutes value and the way we view money. Indeed, as networks of contracts, markets generate prices as emergent phenomena of negotiation rather than mechanistic mappings of input prices to output prices. As such market prices are quantum in the sense that the price of any product is ultimately unknown until a contract is negotiated explicitly or implicitly through custom. In markets, what matters is one's ability to negotiate value and what transpires as “money” arises from the contractual reach one has across these markets. To this end, money is any technology used to transmit information about the value associated with contractual obligations and must necessarily exist in a duality of abstract mathematical concepts and physical assets whose own value in contractual use is tethered to the credibility of the issuer to adhere to its contractual obligations. This duality in the nature of money, it is argued, raises questions on the stability or volatility perceived in the various forms of money from traditional fiat currencies to emerging digital currencies that may impact the strategic positioning of central banks, regulators, commercial financial institutions and payment systems operators. While the application of artificial intelligence (AI) is embedded within daily enterprise operations across a range of industries —for example, entertainment, healthcare, and media communications—the application of AI within the payments industry is still in its infancy outside of the FinTech segment. There appears to be a gap in that, while AI implementations are beginning to take shape at the customer-facing end of the payments value chain, there is limited discussion of implementation at the supporting back-end of the payments value chain—defined in this report as the Payment Market Infrastructures that constitute the wholesale payments system—which brings together financial intermediaries and financial market infrastructures such as Payments Canada, participating financial intermediaries, and technology service providers like CGI.
This piece provides a summary of the key factors that drive the emergence of tiered relationships in payment systems and other financial market infrastructures. More specifically, the piece highlights key considerations surrounding the measurement, monitoring, and resolution of tiered structures in a modernised payment system; specifically those considerations not adequately defined under Principle 19 of the Principles for Financial Market Infrastructures (PFMI). Not having a systematic approach to understanding tiering arrangements could expose payments clearing and settlement organisations to risks and could compromise objectives related to improving and modernising payment systems. This piece will identify key considerations to help guide the understanding of the dependencies in tiered participation arrangements and associated risks. It will suggest that more substantive research could be useful to measure and evaluate tiered participation risks. .
The stochastic process modelling simulator is something that is used to test and validate implemetations of stochastic processes used in the various simulations conducted as part of past and futre research. For example the simulator is used in the agent-based residential mortgage-backed securitisation (RMBS) model to produce individual and joint stochastic state transition probability matrices for traditional asset and RMBS indices.
Keywords: Stochastic calculus, asset price path generation, Java
The key to the understanding of any word, term or concept is the explicit dissection into the word’s, term’s or concept’s anatomical structures. It the realms of the social sciences, this implies micro-level analysis of the word, term or concept. Not a macro-level investigation and application of pre-existing theories based at that macro-level. Yet, it remains a wonder why economists and political theorists alike find themselves faced with an enigmatic tinderbox when it comes to the provision of a social enlightenment regarding the term “Globalisation”. In fact, the current ethos remains so opaque that one is more likely to fit a camel through the eye of needle than be poised in confidence when expressing the exiting global political-economic status quo as a product of general dispositions towards globalisation.
This dissertation redresses this issue by conveying the true nature of globalisation in accordance with the Spontaneous Order Theory of the Scottish Enlightenment and Friedrich A. Hayek and The Exit Route Theory of Sheri M. Markose. Thereby globalisation is defined to be that institution brought about by the process of circumvention of state regulatory structures by private agents in their bid to innovate around prohibitions of otherwise profitable activity. Understood as such, globalisation represents just one cluster of those non-pre-determinable innovations and the rules thereof that constitute the on-going process of regulatory arbitrage. Keywords: Monetary policy transmission mechanism, Globalisation, Computability economics, complexity theory, complex adaptive systems, VAR, impulse response,
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