We develop a model of firm learning in volatile markets with noisy signals and test its predictions using historical … from differences in expectations rather than market conditions. We find evidence for the model's predictions that … improvements from learning are faster where market signals are noisier. …

This paper provides a new perspective on the exchange rate disconnect puzzle by referring to the expectations building … mechanism in foreign exchange markets. We analyze the role of expectations regarding macroeconomic fundamentals for expected … expectations regarding GDP growth, inflation, interest rates, and current accounts. Our empirical findings show that fundamentals …

theory for the expectations building mechanism due to the robust finding that in ation expectations are able to explain …This paper provides a new perspective on the exchange rate disconnect puzzle by referring to the expectations building … mechanism in foreign exchange markets. Therefore, we analyze the role of expectations regarding macroeconomic fundamentals for …

This paper is the first attempt to investigate the performance of different learning rules in fitting survey data of … household and expert inflation expectations in five core European economies (France, Germany, Italy, Netherlands and Spain …). Overall it is found that constant gain learning performs well in out-of-sample forecasting. It is also shown that households …

-adjusted, uncovered interest parity model with unrestricted parameters, emphasizing the importance of modeling market expectations of … monetary policy. I use consensus forecasts as a proxy for market expectations. The analysis on the Deutsche mark, Canadian … expectations of future monetary policy, Taylor rule fundamentals are able to forecast changes in the exchange rate, even over short …