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A key theoretical prediction in financial economics is that under risk neutrality and rational expectations a currency's forward rates should form unbiased predictors of future spot rates. Yet scores of empirical studies report negative slope coefficients from regressions of spot rates on...
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A key theoretical prediction in financial economics is that under risk neutrality and rational expectations a currency's forward rates should form unbiased predictors of future spot rates. Yet scores of empirical studies report negative slope coefficients from regressions of spot rates on...
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published studies. The literature shows strong publication bias: researchers report negative and insignificant estimates less … often than they should, which pulls the mean estimate up by about 0.5. When I correct the mean for the bias, for macro …
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