IDEAS home Printed from https://ideas.repec.org/a/jfr/ijfr11/v6y2015i4p187-193.html
   My bibliography  Save this article

Evaluating Exchange Rate Models Based on Rational Expectations versus Imperfect Knowledge Economics

Author

Listed:
  • Ismail Onur Baycan

Abstract

Understanding the factors that explain the causes of exchange rate swings has been one of the major concerns in the international finance field. Conventional models, which utilize Rational Expectation Hypothesis (REH), are frequently tested and employed in the international finance literature to explain the exchange rate fluctuations. On the other hand, Imperfect Knowledge Economics (IKE) has recently been developed as an alternative approach to understand the same concerns on the exchange rate swings. This paper, for the first time, employs the Lakatosian framework of Scientific Research Programs (SRPs) to evaluate the main theoretical contributions of these models on the exchange rate fluctuations. First, the study evaluates the novel facts that are associated with each of the Lakatosian protective belts for both of these SRPs. In addition, the study evaluates the empirical evidence of each SRP related to these novel facts, and argues whether or not these are theoretically and empirically progressive in the Lakatosian framework.

Suggested Citation

  • Ismail Onur Baycan, 2015. "Evaluating Exchange Rate Models Based on Rational Expectations versus Imperfect Knowledge Economics," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 6(4), pages 187-193, October.
    • Handle: RePEc:jfr:ijfr11:v:6:y:2015:i:4:p:187-193
    DOI: 10.5430/ijfr.v6n4p187
    as

    Download full text from publisher

    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/8093/4822
    Download Restriction: no
    File URL: http://www.sciedu.ca/journal/index.php/ijfr/article/view/8093
    Download Restriction: no
    File URL: https://libkey.io/10.5430/ijfr.v6n4p187?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jfr:ijfr11:v:6:y:2015:i:4:p:187-193. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gina Perry (email available below). General contact details of provider: http://ijfr.sciedupress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.