Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
964122 | Journal of International Financial Markets, Institutions and Money | 2011 | 6 Pages |
Abstract
This article argues that Pippenger's (2011) “Solution to the forward-bias puzzle” must be regarded as an econometric explanation of the famous puzzle, although it does not offer an exhaustive economic answer to it. Some of Pippenger's (2011) findings are reproduced and established in a cointegrated multiple time series model. It is suggested that economists should stop trying to working out the forward-bias puzzle and start looking for fundamentally better models of foreign exchange rate determination. A tentative alternative is provided.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Christian Müller,