@TechReport{dp-321,
  author        = {Menkhoff, Lukas and Rebitzky, Rafael and Schröder,
                  Michael},
  astring       = {Lukas Menkhoff, Rafael Rebitzky and Michael Schröder},
  title         = {Do Dollar Forecasters Believe too Much in PPP?},
  month         = {September},
  year          = {2005},
  pages         = {21},
  size          = {163},
  number        = {321},
  language      = {en},
  keywords      = {Exchange rate expectations, forecasting, fundamental
                  analysis, technical analysis, purchasing power parity},
  jelclass      = {F31, G14},
  zfassung      = {},
  abstract      = {This paper extends earlier studies on exchange rate
                  expectations' formation by using new data and adding
                  information about forecasters' reliance on fundamental
                  analysis for the first time. We replicate the conventional
                  result of non rational expectations. Moreover, biases in
                  expectations are identified as professionals significantly
                  belief too much in mean reversion, mean being represented
                  by PPP. When respondents are grouped on their reliance to
                  fundamental analysis, fundamentalists reveal an even
                  stronger bias. Those, who rely the least on fundamentals
                  preferring technical analysis instead , show a
                  significantly smaller bias towards PPP in lieu of expecting
                  too much trend extrapolation. Biased beliefs will grow
                  stronger when the US Dollar is further away from PPP.
                  Finally, the accuracy of the expectations is poor for both
                  groups however we find directional forecasting ability.}
}