The forward-bias puzzle: Still unsolved
This article argues that Pippenger's (2011) "Solution to the forward-bias puzzleâ must be regarded as an econometric explanation of the famous puzzle, although it does not offer an exhaustive economic answer to it. Some of Pippenger's (2011) findings are reproduced and established in a cointegrated multiple time series model. It is suggested that economists should stop trying to working out the forward-bias puzzle and start looking for fundamentally better models of foreign exchange rate determination. A tentative alternative is provided.
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Volume (Year): 21 (2011)
Issue (Month): 4 (October)
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- Pippenger, John, 2011. "The solution to the forward-bias puzzle," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 21(2), pages 296-304, April.
- Pippenger, John, 2011. "A Complete Solution To The Forward-Bias Puzzle," University of California at Santa Barbara, Economics Working Paper Series qt5gq9z4j0, Department of Economics, UC Santa Barbara.
- Maurice Obstfeld & Kenneth Rogoff & Ben Bernanke & Kenneth Rogoff, "undated".
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- Obstfeld, Maurice & Rogoff, Kenneth, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," Center for International and Development Economics Research, Working Paper Series qt0sx02651, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
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