Janet Jiang is a Principal Researcher in the Research Team in the Banking and Payments Department (BAP). Her current research interests include optimal loss-sharing rules for the large value payment system, the effect of new means of payment on central bank policies, and experimental studies of bank runs, asset bubbles, multiple currencies and competing means of payment. She has also conducted research on how inflation affects banking crises and trading patterns. Janet obtained her PhD in Economics from Simon Fraser University.
Staff analytical notes
This note discusses insights from historical launches of new payment methods and related laboratory experiments on the potential adoption and use of a central bank digital currency in the Canadian context.
Staff working papers
Standard monetary models adopt an infinite horizon with discounting. Testing these models in the lab requires implementing this horizon within a limited time frame. We compare three approaches to such an implementation and discuss their relative advantages.
Many central banks are considering issuing a central bank digital currency (CBDC). This would introduce a new policy tool—interest on CBDC. We investigate how this new tool would interact with traditional monetary policy tools, such as the interest on central bank reserves.
In a cashless economy, would the private sector invest in the optimal level of safety in a deposit-based payment system? In general, because of externalities, the answer is no. While the private sector could over- or under-invest in safety, the government can use taxes or subsidies to correct private incentives.
Many central banks are considering whether to issue a new form of electronic money that would be accessible to the public. This new form is usually called a central bank digital currency (CBDC). Issuing a CBDC would have implications for the financial system and, more broadly, the wider economy.
We investigate competition between two intrinsically worthless currencies as a result of decentralized interactions between human subjects. We design a laboratory experiment based on a simple two-country, two-currency search model to study factors that affect circulation patterns and equilibrium selection.
We model the introduction of a new payment method, e.g., e-money, that competes with an existing payment method, e.g., cash. The new payment method involves relatively lower per-transaction costs for both buyers and sellers, but sellers must pay a fixed fee to accept the new payment method.
We develop a model to explain a puzzling trend in cash demand in recent years: the value of bank notes in circulation as a percentage of GDP has remained stable despite decreasing cash usage at points of sale owing to competition from alternative means of payment such as credit cards.
We study the formation of price bubbles on experimental asset markets where cash earns interest. There are two main conclusions.
A "sunspot" is a variable that has no direct impact on the economy’s fundamental condition, such as preferences, endowments or technologies, but may nonetheless affect economic outcomes through the expectations channel as a coordination device. This paper investigates how people react to sunspots in the context of a bank-run game in a controlled laboratory environment.
We study price posting with undirected search in a search-theoretic monetary model with divisible money and divisible goods. Ex ante homogeneous buyers experience match specific preference shocks in bilateral trades. The shocks follow a continuous distribution and the realization of the shocks is private information.
- “One or Two Monies?”
(with Mei Dong), 2010, Journal of Monetary Economics, Vol.57, p.439-450.
- “Banking Crises in Monetary Economies”,
2008, the Canadian Journal of Economics, vol. 41, p.80-104.
- “Experimental Evidence of Bank Runs as Pure Coordination Failures”,
(with Jasmina Arifovic and Yiping Xu), 2012, Revised and Resubmitted to Journal of Economic Dynamics and Control
- “Money and Price Posting under Private Information”,
(with Mei Dong), Journal of Economic Theory (2014) 150, 740-777.
- Eliminating Laboratory Asset Bubbles by Paying Interest on Cash,
(with Giovanni Giusti and Yiping Xu)
- Mechanism Design and Competitive Markets in a Quasi-linear Environment with Limited Commitment
- Information, Prices and Ex-ante Investment,
(with Mei Dong)