COWLES FOUNDATION FOR RESEARCH IN ECONOMICS
AT YALE UNIVERSITY

Box 208281
New Haven, CT 06520-8281

COWLES FOUNDATION DISCUSSION PAPER NO. 1168

Evaluating the Information Content and Money Making Ability
of Forecasts from Exchange Rate Equations

Ray C. Fair

December 1997

This paper evaluates a particular set of equations for the dollar/yen and dollar/mark exchange rates. The forecasts from the equations dominate both forecasts from the random walk model and forecasts using the forward rate. The results also suggest that money may be able to be made in the forward markets using the equations.