Do foreign exchange forecasters apply asymmetric loss functions? Evidence from three major exchange rates

This article investigates which type of loss function is consistent with the hypothesis that major exchange rate forecasts, i.e. the euro, the British pound, and the Japanese yen vis-à-vis the US dollar, are rational. We apply a comprehensive data set, which also allows us to examine different forecast horizons and heterogeneity of forecasters.     

Two currencies,one model? Evidence from the Wall Street Journal forecast poll

We use the foreign exchange forecasts of the Wall Street Journal (WSJ) poll to analyze the expectation formation process of forecasters for the exchange rates of the euro and the yen vis-à-vis the U.S. dollar for the period 1999–2005. We also compare the expectation formation process with the actual exchange rate process. We find that most forecasters have contrarian exchange rate expectations, but our results also indicate significant heterogeneity between forecasters. While the actual exchange rate process of the yen/dollar exchange rate shows negative autocorrelation, the dollar/euro exchange rate exhibits positive autocorrelation.     

Notes and Communications

Note

Notes and Communications     

Human rights in industrial relations – the Israeli approach

Basic human rights are supposed to protect people from abuse and harm. They are the means whereby we protect our humanity. One would expect, therefore, that basic human rights would be valid and sacred in any context, including industrial relations. However, the complexity of the employee–employer relationship obscures this issue, and it is not clear whether such rights can be protected or whether they are valid in the context of industrial relations. Since rights are relational, they are preconditioned on the special nature of the relationship between employee and employer. Hence, the specific meaning that these rights have in industrial relations cannot be grounded in the notion of human rights as such, but rather depends on the special relationships between employers and employees. Though much legislation has been passed to regulate the relationship between employees and employers, the issues surrounding this relationship remain one of the most debated topics in business ethics. Our paper focuses specifically on the right to equal pay and the right to privacy. With respect to the right to property, the paper examines whether there is a conflict between general human rights and the fundamental right of employers to their property. The Israeli legislature has responded to this conflict by enacting 'protective laws' that legally outline and mandate certain human rights. Under these laws, employees are prevented and prohibited from waiving the rights granted to them by law, even if employed in private industries. Despite this legislative effort, market forces are at times stronger, and consequently some basic rights are not fully applied or implemented.