Special issue in the Journal of New Finance: Crypto-economics, Decentralized Finance (DeFi), and other monetary digital alternatives

Crypto-economics is a catchy term for an interdisciplinary, emergent study area that combines ideas and concepts from economics, game theory, and related disciplines in the design and analysis of peer-to-peer, cryptographic systems in which some form of exchange of value takes place.

The origins of such systems can be traced to Bitcoin in 2009 and following “alt-coins”, but the emergence of programmable protocols in the form of “smart contracts”, starting with the Ethereum network, encouraged entrepreneurs and innovators to devise and deploy a diversity of crypto-economic mechanisms. These started with “tokens”, including fungible (e.g. ERC20) and non-fungible or collectibles (e.g. ERC721), but that now spans to a variety of organizations and models that have come to be known as “decentralized finance” (DeFi). A critical development in DeFi was the launch of MakerDAO in 2014, and its related stable-coin DAI, a decentralized alternative to previous attempts to attain stable tokens. The launch in 2018 of Uniswap was a cornerstone for moving users to decentralized exchanges, and a collection of innovations followed. The recent inception of Ethereum 2.0 and the emergence of other smart contract blockchain networks that target DeFi suggest that the field would expand with a high pace of innovation (including of course failures).

The above-described landscape has received limited attention from scholarly research, with most of the literature focusing on the analysis of prices, volatility, and properties using the same methods for non-blockchain-based assets and services. This special issue aims at fostering discussion, inquiry, and thorough analysis of crypto-economics, decentralized finance, and other digital monetary alternatives.

That is because crypto-economics and decentralized finance are not the only innovations with the potential to disrupt the existing monetary arrangements. Experimentations with and proposals for “stable-coins,” as mentioned above, but also for “Central Bank Digital Currencies” (CBDC). They are also part of the landscape we would like to invite researchers to purview.

Contributions sought are not limited to a single disciplinary perspective or methodological research approach, but a diversity of perspectives on the field is welcomed.

The topics of this special issue include but are not limited to:

  • Empirical studies of tokens, cryptocurrencies, DApps, stablecoins, and CBDCs from the perspective of economics.
  • Surveys and systematic reviews of classes of digital monetary instruments in general, and DeFi services in particular.
  • Analysis of DeFi mechanisms and protocols, e.g. flash loans, liquidity pools.
  • Studies of stable coins, CBDCs, and lending in general, and from the perspective of financial repression in particular.
  • Studies of particular applications that are based in DeFi, as decentralized insurance.
  • Studies of governance in blockhains, DAOs and DeFi applications related to economic aspects.
  • Studies on the psychology, perception and understanding of digital monetary instruments in general, and DeFi in particular, by their users, e.g. as related to risk.
  • Comparisons and critical accounts of decentralized protocols and different DeFi mechanisms among themselves and in relation to other new digital monetary arrangements.
  • Investigation in the description, causes, consequences, forecasts, and normative prescriptions about the legal framework and regulation of new digital monetary instruments in general, and DeFi products in particular (beyond the current regulation of cryptocurrencies and DAOs).

Guest Editors

Review and Submission Processes

We invite authors to submit a 1 page paper proposal with title and abstract. Selected proposal will be invited to submit the final version of the manuscript by October 30th, 2021. All papers will be subject to a double blind peer review procedure.

Previous Calls for Papers

Call for papers: Economics of Recovery from Covid-19 (closed on March 31st, 2021)

The global economy has been deeply injured by several months of confinement, and the exit from lockdown will be accompanied by a gradual release of restrictions. Economic activity will be required to adapt to new social distancing regulations, and economists struggle to forecast when we will return to pre-crisis output and productivity. Some sectors may be hit harder (transportation, tourism, restaurants, public entertainment, amongst others) and will have to transform. Nouriel Roubini affirmed that the pandemic had “delivered the fastest, deepest economic shock in history”, and the IMF managing director Kristalina Georgieva said: “never in the history of the IMF have we witnessed the world economy coming to a standstill.”

Governments, central banks, and international bodies have immediately responded with large, often open-ended plans to provide liquidity and subsidies. In the short term, debt relief and capital support can alleviate temporary shocks to companies’ balance sheets. However, protracting these programs without an unbiased cost-benefit analysis may start a subsidy war, perpetuate overcapacity in distressed sectors (Bénassy-Quéré, Marimon, Martin, Pisani-Ferry, Reichlin, Schoenmaker, Weder di Mauro (2020)), and maintain a lifeline to malinvestment.

Universidad Francisco Marroquin and the Journal of New Finance are launching an initiative to foster high-quality research to discuss how the economy and the financial markets can recover from this crisis. We invite young and senior scholars who want to shape the vision of our university and participate in the policy debate.

The editors encourage submissions regarding theoretical contributions, empirical research, and surveys, which combine rigorous research and thought-provoking ideas, on the following topics:

1)The nature of the crisis. While previous crises had an endogenous origin, Covid-19 is an external shock to the economy (See Danielsson, Macrae, Vayanos, Zigrand (2020)). What is the nature of this crisis and what similarities can be gathered from other crises, such as those we witnessed in 1929 and 2008?

2) What economic history can teach. World War I, the Great Depression, World War II, the 2008 Great Recession, and other episodes in human history have experimented with different Government responses and policy outcomes. These and other episodes can suggest key lessons on how to promote the most effective recovery.

3) Objectives of recovery. What do we mean by recovery and what objectives should policymakers and private enterprise pursue? Repair private enterprises’ balance sheets and production chains; forester financial stability; allow for sustainable development; invest in common goods and facilities to prevent shocks like Covid-19 (research, healthcare, financial, amongst others), etc. ?

4) Macroprudential, monetary and fiscal policies. Several mechanisms have been deployed and are ready to intervene (monetary policy, fiscal policies, international financial assistance mechanisms - IMF, World Bank, ESM - new regulations, amongst others).

  • Do we need more credit to facilitate recovery? (Biggs, Michael and Mayer, Thomas and Pick, Andreas, (2010)).
  • Should central banks throw helicopter money and monetize debt? (Blanchard, Pisani-Ferry (2020))
  • After the 2008 crisis regulators extended liquidity and capital requirements, and central banks started to act as liquidity providers of last reports. How should supervisors and regulators act to guarantee a financial environment that facilitates a sustainable and rapid recovery?
  • How will the crisis affect public and private debt?
  • What recommendations can be drawn from a policy mix perspective? For example, Barthelemy, Sylvain, Binet, Pentecote Jean-Sebastien (2020) study economic recoveries of 276 financial crises and find that government spending does not help activity bounce back, unlike other economic policies.
  • Relationships between healthcare system organization and COVID-19 treatment efficiency.
  • Correlations between the lockdown, CO2 emissions, and climate risk.

5) Microeconomics of recovery. What is the effectiveness of measures such as income and employment protection, social protection, regulation of immigration, and initiative to facilitate reemployment? How will social distancing change operational models and productivity for companies? For example Block, Hoffman, Raabe, Beam Dowd, Rahal, Kashyap, Mills (2020) suggest allowing a strategic reduction of contact (including some social contact with low risk) can increase efficiency of social distancing.

6) Globalization of economy. Will international trade be permanently impacted? What are the risks and opportunities for geographically concentrated production structures? Are we going to observe a re-nationalization of value chains? How will the economics of immigration change?

7) Financial and economic theory. Is mainstream theory equipped with appropriate tools and models to cope with this crisis? Borio (2012) highlighted many analytical challenges for the prevailing paradigms and suggested exploring heterodox alternatives (introducing heterogeneous, incomplete knowledge, disequilibrium analysis, amongst others).

8) Impact on Risk management. How will risk analysis evolve in organizational, and financial systems? What are the challenges in introducing fundamental uncertainty and dynamic risk appetite into modeling? How will assumptions change in quantitative modeling techniques? Is increased stress testing the panacea to filling the gap of standard models?

Successful papers will be published in a Special Issue of the Journal of New Finance. Manuscripts shall be submitted by March 31st 2021, following the journal’s standard submission procedure.


Barthelemy, Sylvain, Binet Marie-Estelle, Pentecote Jean-Sebastien (2020), “Worldwide Economic
Recoveries from Financial Crises Through the Decades”, Journal of International Money and
, Available online 15 April 2020, https://doi.org/10.1016/j.jimonfin.2020.102204

Bénassy-Quéré Agnès, Marimon Ramon, Martin Philippe, Pisani-Ferry Jean, Reichlin Lucrezia,
Schoenmaker Dirk, Weder di Mauro Beatrice, (2020), “Repair and reconstruct: A Recovery
Initiative”, CEPR Policy Portal, 19 April 202 https://voxeu.org/article/repair-and-reconstruct-recovery-initiative

Biggs, Michael and Mayer, Thomas and Pick, Andreas, (2010), “Credit and Economic Recovery:
Demystifying Phoenix Miracles”, SSRN (March 15, 2010), http://dx.doi.org/10.2139/ssrn.1595980

Blanchard Olivier, Pisani-Ferry Jean (2020), “Monetisation: Do not panic”, VOX CEPR Policy Portal,09
April 2020, https://voxeu.org/article/monetisation-do-not-panic

Block Per, Hoffman Marion, Raabe Isabel J., Beam Dowd Jennifer, Rahal Charles, Kashyap Ridhi, Mills
Melinda C. (2020), “Social network-based distancing strategies to flatten the COVID 19 curve in a
post-lockdown world”, arXiv:2004.07052

Borio Claudio (2014), “The financial cycle and macroeconomics: What have we learnt?”, Journal of
Banking & Finance, August 2014, https://doi.org/10.1016/j.jbankfin.2013.07.031

Danielsson Jon, Macrae Robert, Vayanos Dimitri, Zigrand Jean-Pierre, (2020), “The coronavirus crisis is
no 2008”, VOX CEPR Policy Portal, 26 March 2020, https://voxeu.org/article/coronavirus-crisis-no-2008