The Marshallian macroeconomic model: A progress report

In this progress report, we first indicate the origins and early development of the Marshallian macroeconomic model (MMM) and briefly review some of our past empirical forecasting experiments with the model. Then we present recently developed one-sector, two-sector and n-sector models of an economy that can be employed to explain past experience, predict future outcomes and analyze policy problems. The results of simulation experiments with various versions of the model are provided to illustrate some of its dynamic properties that include “chaotic” features. Last, we present comments on planned future work with the model.     

Assessing Supermarket Product-Line Decisions: The Impact of Slotting Fees

In this paper, I estimate a structural demand model for a product category in a supermarket chain. I use the model to infer manufacturers' side payments to obtain shelf access in the supermarket and I estimate the impact of these fees on product assortment. The results suggest that the supermarket carries some unprofitable products. Instead of eliminating them, it charges slotting fees to the manufacturers of those products. Since the absence of slotting fees would lead the retailer to discontinue some products, this paper argues that forbidding slotting fees would harm consumers. Welfare calculations reveal that product assortment in this market is close to socially optimal.     

Relative price efficiency,technical change,and scale economies for large commercial banks

One of the more important and frequently researched topics in banking is the production process. Previous studies of bank production, however, have employed a methodology which is not appropriate for regulated firms. We generate cost estimates for large commercial banks utilizing a generalized cost model which subsumes the commonly used model as a special case. Our findings suggest that the traditional methodology is inappropriate for the sample banks and generates biased estimates of cost parameters, scale effects, and the influence of technological change. The new methodology allows us to measure directly the effect of regulation on bank costs. The effect found is small, but significant.