In light of research questioning the usefulness of economists' models of exchange-rate determination, this paper investigates the rationality of survey measures of expectations for Deutschmark/dollar exchange rates for 1989-97. Using Liu and Maddala's (1992) "restricted cointegration" test, the...

An estimation of a life cycle cum rational expectations model that allows for uncertain future interest rates. The results show that the model is strongly rejected using post World War II U.S. data.

A comparison of the performance of forecasts by economists (the Livingston survey), households (the Michigan Survey of Consumer Finances), and a time series model (ARIMA).

A review of the literature concerning how individuals learn to form rational expectations and a discussion of the meaning of rationality in a macroeconomy characterized by highly decentralized markets.

Development of rational expectations models of the business cycle has been the central issue in macroeconomics over the last 15 years. The postulate that expectations are rational imposes considerable discipline on business cycle analysis. In this essay we review the current literature on...

An introduction to a new exchange-rate index to measure the foreign-exchange value of the dollar. The authors develop a model of U.S. merchandise trade, featuring the new index.

For more than a decade the Federal Reserve Bank of Atlanta's trade-weighted dollar index has served as a summary statistic for foreign exchange movements of the dollar. Recent revisions acknowledging significant changes in the worldwide economy ensure that the index will continue to contribute...