Does money matter in inflation forecasting?.

This paper provides the most fully comprehensive evidence to date on whether or not monetary aggregates are valuable for forecasting US inflation in the early to mid 2000s. We explore a wide range of different definitions of money, including different methods of aggregation and different collections of included monetary assets. In our forecasting experiment we use two non-linear techniques, namely, recurrent neural networks and kernel recursive least squares regression - techniques that are new to macroeconomics. Recurrent neural networks operate with potentially unbounded input memory, while the kernel regression technique is a finite memory predictor. The two methodologies compete to find the best fitting US inflation forecasting models and are then compared to forecasts from a naive random walk model. The best models were non-linear autoregressive models based on kernel methods. Our findings do not provide much support for the usefulness of monetary aggregates in forecasting inflation

Examining the Nonlinear Effects in Satisfaction-Loyalty-Behavioral Intentions Model

Extant research has widely investigated linear functional forms in satisfaction and loyalty models. Though complex nonlinear nature of satisfaction loyalty link is suggested by several researchers, few attempts have been made to empirically examine nonlinearity. Moreover, researchers have used divergent functional forms to model nonlinearity and their findings are often inconclusive. In this study we use nonlinear form to describe the relationship between satisfaction, attitudinal loyalty, purchase loyalty and customer behavioral intentions such as willingness to pay more and external and internal complaining responses in the context of business-to-consumer ecommerce. We find modest empirical support for nonlinear effects in the relationship. Results support nonlinearity only in the case of attitudinal loyalty to internal complaining response link. Results also present evidence about the mediating role of attitudinal loyalty in the relationship between satisfaction, purchase loyalty, willingness to pay more and internal complaining responses.

Do business density and variety determine retail performance?

Outlet location plays a crucial role in retail strategy. In this paper we study the relationship between spatial density (concentration) of retailers in the trade area and their economic performance. This analysis will help managers figure out the economic potential of starting a retail business in a given area, reducing business start-up risks. We find that retail businesses located in high and low retail density zones enjoy higher performance levels, consistent with competitive advantage arising from agglomeration economies and local market power respectively. We also find that retail businesses located in intermediate density areas use a differentiation strategy based on business variety (diversification across stores). Outlets located in areas with the highest variety enjoy performance levels similar to those achieved in the agglomeration and low density areas. The results suggest that retail companies should jointly consider variety and density to determine location

Empirical analysis of countervailing power in business-to-business bargaining

This paper provides a comprehensive econometric framework for the empirical analysis of countervailing power. It encompasses the two main features of pricing schemes in business-to-business relationships: nonlinear price schedules and bargaining over rents. Disentangling them is critical to the empirical identification of countervailing power. Testable predictions from the theoretical analysis for a pragmatic reduced form empirical pricing model are delineated. This model is readily implementable on the basis of transaction data, routinely collected by antitrust authorities and illustrated using data from the UK brick industry. The paper emphasizes the importance of controlling for endogeneity of volumes and established supply chains and for heterogeneity across buyers and sellers due to intrinsically unobservable outside options