Prognostications With Applications to the British Pound

Augustine C. Arize, John Malindretos, Tao Guo, Demetri Tsanacas, Lawrence Verzani


This paper scrutinizes several exchange rate models, considers the effectiveness of their predictive performance after applying both parametric and nonparametric techniques to them, and chooses the forecasting predictor with the smallest root mean square forecast error (RMSE). Equation (34) displays empirical evidence consistent with a better example of an exchange rate model, although none of the evidence gives us a completely satisfactory forecast. In the end, the models’ error correction versions will be fit so that plausible long-run elasticities can be imposed on each model’s fundamental variables.

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This work is licensed under a Creative Commons Attribution 4.0 International License.

This journal is licensed under a Creative Commons Attribution 4.0 License.

International Journal of Financial Research
ISSN 1923-4023(Print)ISSN 1923-4031(Online)


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