Jon Danielsson, Robert Macrae, 12 August 2019

The type of risk we most care about is long-term, what happens over years or decades, but we tend to manage that risk over short periods. This column argues that the dissonance of risk is that we measure and manage what we don't care about and ignore what we do.

John Kay, 13 June 2019

John Kay of St John's College, Oxford explains why the scope for applying probabilistic-type reasoning to economics is limited.

Barbara Rossi, 14 November 2013

Predicting exchange rates is still an inexact science. Economic models perform poorly, and a plethora of alternative methods have been attempted. This column guides the reader through the state of the art, reviewing various predictors, models, and data specifications. Despite a large and divergent literature chasing this holy grail, the toughest benchmark remains the random walk without drift.

Pasquale Della Corte, Lucio Sarno, Ilias Tsiakas, 18 January 2008

The forward premium, the difference between the forward exchange rate and the spot exchange rate, contains economically valuable information about the future of exchange rates. Here is the evidence that it can help predict short-run rates and that investors who ignore it and use random walk models may be leaving money on the table.

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