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Are foreign exchange forecasts rational? : New evidence from survey data

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  • Dominguez, Kathryn M.

Abstract

Tests of rational expectations in foreign exchange markets have been inconclusive because of disagreement over the underlying asset pricing model. This paper uses a newly available set of data on foreign exchange forecasts to examine directly expectations formation in four foreign currency markets. Generally, results do not support the simple rational expectations hypothesis.
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  • Dominguez, Kathryn M., 1986. "Are foreign exchange forecasts rational? : New evidence from survey data," Economics Letters, Elsevier, vol. 21(3), pages 277-281.
    • Handle: RePEc:eee:ecolet:v:21:y:1986:i:3:p:277-281
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