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 …

that in ation expectations affect both the dispersion across forecasters and realized forecast errors. …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 …

2004 to 2012, we find strong evidence that the forecasts for developing countries are biased at all forecast horizons. For … increases again at the 24-month horizon. Based on the magnitude of the forecast errors and the direction of change, long … forecast horizon …

In this paper, we use the largest exchange rate survey in Colombia to test for the rational expectations hypothesis … episodes of exchange rate appreciation preceded expectations of further appreciation in the short run, but were marked by … depreciations in the long run. This reversal largely explains the stabilizing pattern of expectations. Additionally, we find that …

rates via the expectations hypothesis (EH). While the EH has been systematically rejected in the data, existing work … evaluating the EH generally assumes either full-information rational expectations or stationarity of beliefs, or both. As such … the EH. We introduce a model of expectations formation which features time-varying means and accommodates deviations from …