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Prognostications With Applications to the British Pound

Author

Listed:
  • Augustine C. Arize
  • John Malindretos
  • Tao Guo
  • Demetri Tsanacas
  • Lawrence Verzani

Abstract

This paper scrutinizes several exchange rate models, considers the effectiveness of their predictive performance after applying both parametric and nonparametric techniques to them, and chooses the forecasting predictor with the smallest root mean square forecast error (RMSE). Equation (34) displays empirical evidence consistent with a better example of an exchange rate model, although none of the evidence gives us a completely satisfactory forecast. In the end, the models¡¯ error correction versions will be fit so that plausible long-run elasticities can be imposed on each model¡¯s fundamental variables.

Suggested Citation

  • Augustine C. Arize & John Malindretos & Tao Guo & Demetri Tsanacas & Lawrence Verzani, 2019. "Prognostications With Applications to the British Pound," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(4), pages 143-151, July.
    • Handle: RePEc:jfr:ijfr11:v:10:y:2019:i:4:p:143-151
    DOI: 10.5430/ijfr.v10n4p143
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    References listed on IDEAS

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