Modeling Electronic Money Dynamics: A Complex System Perspective

Electronic money products have advanced quickly with the rapid growth of electronic commerce, and different stakeholders show shared concern on the related impact. In order to have a holistic and in-depth analysis of the e-money issues, this paper studies the e-money dynamics from complex system perspective. System complexity analysis is conducted and a four-phase modeling approach is proposed. This model takes consideration of the e-money circulation in e-commerce as well as its correlation with monetary policy and macro-economy environment. Key variables are chosen and causal relationships between them are built. A software system EADS based on this model is developed, and the evolution of e-money and its impact on macro-economy are simulated and analyzed in it. Further research direction and some related topics are discussed as closing remarks.