Bank Size, Specialization and Efficiency in the Netherlands: 1992-1998

In this paper we assess cost and profit efficiency for a sample of banks operating on the Dutch banking market in the period 1992-1998, using stochastic frontier efficiency analysis. Over the entire period, the cost-efficient frontier deteriorates but mean cost efficiency and profit efficiency are relatively stable at the industry level. No evidence is found for trend changes in mean efficiency due to the previous consolidation and deregulation. However, whereas all banks appear to perform rather similarly in terms of cost efficiency, in terms of profit efficiency large general banks and specialized banks clearly outperform small, general banks. Large banks appear to benefit from sheer size and perhaps market power. This is evidence in favor of the large banks behaving collusively and capturing oligopoly rents. Specialized banks operate savely and efficiently in what might be termed a niche market.financial economics and financial management ;

The Phillips Curve, the Persistence of Inflation, and the Lucas Critique:Evidence from Exchange-Rate Regimes: Comment

The purpose of this comment is to demonstrate that their theoretical result concerning the first order derivative of relative inflation persistence with respect to the degree of accommodation is incorrect. As a consequence, the sign of the first derivative becomes ambiguous. We provide an economic explanation of this result, elaborating on the three distinct transmission mechanisms in the AS (relative) model. Moreover, we propose an economically meaningful modification of the original AS model that restores a strictly positive relation between exchange rate accommodation and relative inflation persistence.international economics and trade ;