Decision-making, uncertainty and the predictability of financial markets: Essays on interest rates, crude oil prices and exchange rates
Frederik Kunze
Doctoral thesis
Date of Examination:
2018-05-17
Date of issue:
2018-05-24
Advisor:
Bizer, Kilian Prof. Dr.
Referee:
Spiwoks, Markus Prof. Dr.
Referee:
Muntermann, Jan Prof. Dr.
Persistent Address: http://hdl.handle.net/11858/00-1735-0000-002E-E3F5-5
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Abstract
English
Decision-makers are confronted with decisions under uncertainty. Financial uncertainty may adversely affect growth. Theoretically, forecasts may potentially reduce uncertainty and create economic value. Focusing on survey predictions, this cumulative dissertation addresses the economic relevance of interest rate, crude oil and exchange rate forecasts for policy as well as managerial decision-makers and financial market participants, respectively. The first research objective of the presented studies is to compile novel evidence on the accuracy, rationality and usefulness of financial market forecasts delivered by professional analysts. Despite the comprehensible critique regarding their foresight qualities in efficient markets, financial forecasts are to be understood as integral elements for decision-makers of various kinds and hence may even be classified as indispensable. This makes the appraisal of forecasts and the corresponding price-buildings processes even more essential for decision-makers. Following this line of thought and focusing again on interest rates, crude oil prices and exchange rates, the second research objective of this thesis is devoted to the analysis of changing market environments and the resulting effects on expectation formations.
Keywords: uncertainty; applied financial economics; financial forecasts; interest rate forecasts; oil price forecasts; exchange rate forecasts; rationality; forecast evaluation; decision-making
