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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/10419/48465
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| Title: | | Should one rely on professional exchange rate forecasts: An empirical analysis of professional forecasts for the /US-$ rate  |
| Authors: | | Bofinger, Peter Schmidt, Robert |
| Issue Date: | | 2003 |
| Series/Report no.: | | Würzburg economic papers 38 |
| Abstract: | | The study analyses the characteristics of professional exchange rate forecasts for the /US-$ rate. The results indicate that the quality of forecasts produced by profes-sional economists is rather poor and incompatible with the rational expectations hy-pothesis. This dismal result is according to our analysis attributed to the fact that professional forecasts are to a large extend influenced by actual changes in exchange rates. A reasonable explanation for this behaviour can be derived from the behav-ioural finance literature. According to the anchoring heuristic decision processes are often dominated by available pieces of information even if they are obviously of no relevance. |
| Subjects: | | foreign exchange market rational expectations forecasts behavioural finance anchoring heuristics |
| JEL: | | F31 F47 G12 G15 |
| 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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