FOREIGN EXCHANGE RATE EXPECTATIONS: MICRO SURVEY DATA

Abstract

As rational expectations have become a popular benchmark for thinking about financial and macroeconomic hypotheses, many economists have become more interested in directly measuring the expectations of market participants. Although survey data for many domestic variables, including interest rates and inflation rates, have been frequently analysed by many investigators (see, for example, Mishkin 1983: ch. 4), it is only recently that survey data on foreign exchange rates have become available and been analysed. Dominguez (1986) and Frankel and Froot (1987a, b) have exploited the survey data made available by the Money Market Service (MMS), the Amex Bank Review and the Economist Financial Report.1