MacDonald, R. (2000) Expectations formation and risk in three financial markets: surveying what the surveys say. Journal of Economic Surveys, 14(1), pp. 69-100. (doi: 10.1111/1467-6419.00105)
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Abstract
This paper attempts to provide a logical overview of the literature which exploits survey data to examine issues of expectations formation and risk aversion in financial markets. Our survey suggests that: short term expectations are excessively volatile and exhibit bandwagon effects, while longer term expectations appear to be regressive and therefore stabilising; in bond and foreign exchange markets the standard result of forward rate biasedness is due in part to time-varying premia; recent research using disaggregate foreign exchange survey data demonstrates the importance of heterogeneous expectations.
Item Type: | Articles |
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Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | MacDonald, Professor Ronald |
Authors: | MacDonald, R. |
College/School: | College of Social Sciences > Adam Smith Business School > Economics |
Journal Name: | Journal of Economic Surveys |
Publisher: | Wiley-Blackwell Publishing Ltd. |
ISSN: | 0950-0804 |
ISSN (Online): | 1467-6419 |
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