Extensive empirical studies on the rationality of expectations as defined by Muth have revolved around tests on a single series of forecast data, with results differing widely across studies. Rationality as an assessor characteristic has long been of interest in economic theory and practice....

We examine rationality, forecasting accuracy, and economic value of the survey-based exchange rate forecasts for 10 developed and 23 developing countries at the 3-, 12-, and 24-month horizons. Using the data from two surveys for the period from 2004 to 2012, we find strong evidence that the...

This paper solves the canonical dynamic rational inattention problem of Sims (2003) by formulating it in the frequency domain. The solution complements and extends existing results, which have been derived in the time domain. The paper provides a simple algorithm that quickly and accurately...