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Julius-Maximilians-Universität Würzburg >
Lehrstuhl für Volkswirtschaftslehre, Geldund internationale Wirtschaftsbeziehungen, Universität Würzburg >
W.E.P. - Würzburg Economic Papers, Lst. f. VWL, Geld u. internat. Wirtschaftsbeziehungen, Universität Würzburg >
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http://hdl.handle.net/10419/22342
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| Title: | | A systematic comparison of professional exchange rate forecasts with judgmental forecasts of novices : Are there substantial differences?  |
| Authors: | | Schmidt, Robert Leitner, Johannes |
| Issue Date: | | 2004 |
| Series/Report no.: | | Würzburg economic papers 49 |
| Abstract: | | The study at hand deals with the expectations of professional analysts and novices in the context of foreign exchange markets. We analyze the respective forecasting accuracy and our results indicate that there exist substantial differences between professional forecasts and judgmental forecasts of novices. In search of reasonable explanations for the astonishing result, we evaluate the nature of professional and experimental expectations in more detail and find that while professional exchange rate forecasts seem to be biased predictors for the future exchange rates, judgmental forecasts appear to be unbiased. Furthermore, professional forecasters consistently expect a reversal of forgoing exchange rate changes whereas novices expect a continuation of current movements in the short-run and are reversed in the long-run. |
| Subjects: | | Foreign exchange market forecasting behavioral finance anchoring heuristics judgment expertise expectation formation |
| JEL: | | C53 F47 C92 G15 D7 D81 D84 G12 E27 F31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | W.E.P. - Würzburg Economic Papers, Lst. f. VWL, Geld u. internat. Wirtschaftsbeziehungen, Universität Würzburg
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