While in previous literature foreign currency exposure is estimated to be surprisingly small and insignificant, we question in this paper the rationality assumption and show that the traditional use of realized exchange rate changes to approximate unexpected currency shocks leads to a strong...

This paper examines the existence of heterogeneous expectations among market participants in the foreign exchange market by using a data set of individual market expectations for the major currencies, and approaches the formation of expectations from a bounded-rationality approach. We find that...

This paper examines the dispersion of beliefs of market participants in the foreign exchange market and their relative role in forming exchange rate expectations. We find distinct variations in the level of dispersion and document that dispersion arises because of a combined effect of market...

Using a large, previously unexplored international dataset of market forecasts that covers a broad range of interest rates, this paper presents a wealth of empirical evidence on the behavior of the term structure of interest rates in an international perspective. We find that our survey...