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Table 11 (De)-stabilizing expectations

From: Great expectations? evidence from Colombia’s exchange rate survey

Type of expectation k = 1 Month k = 1 Year
Extrapolative \(E_{t}[\Delta S_{i,t+k}]=\beta _{0}+\beta _{1}\Delta S_{t} + \epsilon _{it}\) \(\beta _{1}=\) −0.03** (0.013) \(\beta _{1}=\) −0.13*** (0.015)
Adaptive \(E_{t}[\Delta S_{i,t+k}]=\alpha _{0}+\alpha _{1}(S_{t}-E_{t-k}[S_{it}])+\nu _{it}\) \(\alpha _{1}=\) −0.05*** (0.016) \(\alpha _{1}=\) −0.15*** (0.017)
Regressive \(E_{t}[\Delta S_{i,t+k}]=\gamma _{0}+\gamma _{1}(S_{t}-\bar{S_{t}})+\eta _{it}\) \(\gamma _{1}=\) −0.05*** (0.005) \(\gamma _{1}=\) 0.11*** (0.029)
  1. Source: Authors’ calculations. All estimations correspond to PANEL regressions with fixed effects and robust clustered standard errors, reported in parenthesis. Total number of observations: 4,100 for 1-month horizon and 3,478 for 1-year horizon
  2. ***, **, * correspond to significance levels of 1, 5 and 10 %, respectively