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World Affairs Online
The Rationality Of Economic Forecasts: The Cases Of Rubber, Oil Palm, Forestry And Mining Sector
Forecasts of economic variables is very important for planning and policy making purposes. Forecasts is an important input in decision making processes because obtaining reliable forecasts of some relevant macroeconomic variables is necessary for efficient management of funds, time and resources.Business has always recognised the need for a view of the future and has used explicit forecasts in the design and execution of their economic andJor business policies. For example, a firm trying to decide upon its investment programme will have to take into account not only the current known set of circumstances but also the unknown economic and business conditions in the future. The firm has to form a view about the future, such as the likely sales, costs, prices, competitors' reactions, labour requirements, government regulations and so on. These views about the future values of economic variables are frequently referred to as 'expectations', that is, what the firm expects to happen in the future.In recent years the performances of many microeconomics and macroeconomics series have been erratic. For example, rate of inflation, price of crude oil, prices of primary commodities, rate of interest and other pertinent economic variables have been fluctuating widely and have caused concern among the public, politicians, economists and also the businessmen. According to Mayes (l 981), with such non-uniformity of economic variables observed in the last two decades, the role of expectations has become more relevant in the economic agents' decision making process. Mayes (1981) further states that under the present conditions it has become more important to consider what expectations actually are and how they are formed.The value of economic forecasts of certain macroeconomic variables can be derived from several methods. The three main methods for deriving economic forecasts are (i) time series, (ii) econometric models, and (iii) survey of intentions of concerned agents and organizations. Time seriesanalysis and econometric modeling are the two most widely used methods in economic forecasting, but Holden and Peel (1983) had noted their drawbacks. Recently, economists have turned their direction of interest in evaluating the rationality of economic forecasts from surveys of market participants. The empirical literature on the direct tests of the rational expectations hypothesis is vast and growing. Holden et al. (1985), Lovell (1986), Wallis (1989), Maddala (1991) and Pesaran (1991) had reviewed some of these studies. The aim was to determine whether survey data on economic forecasts are accurate in the Muth's (1961) sense, that is, whether participating economic agents used all available information at the time forecasts are made. in other words, the rational expectations hypothesis of the economic forecast was put to test. In general, the empirical studies do not support the rational expectations hypothesis.Most of the studies carried out to evaluate the rationality of business firms' forecasts of economic variables were conducted on developed nations. Madsen (1993) studies the formation of output expectations in manufacturing industry in Japan, Denmark, Finland, France, Germany, Netherlands, Norway, Sweden and the United Kingdom. He found that the rational expectations hypothesis was weakly rejected. Williams (1988) and Chazelas (1988) found investment forecasts biased predictors of the actual investment value for firms in the United Kingdom and France. Meganck et a!. (1988) have concluded that investment forecasts of the manufacturing firm in Belgium were unbiased predictors of the actual values. However. Daub (1982) failed to find any rationality of the Canadian capital investment intention survey data. On the other hand. a study by Leonard (1982) on employment forecasts by the United States services sectors found that the forecasts were biased and the rationality of these employment forecasts rejected.The purpose of this paper is to present some empirical evidence on the rationality of agricultural firm managers' expectations using survey data. This study is important because it adds to the current literature on the testing of rationality of survey data, in particular, it provides empirical evidence from the perspective of a developing country. As for the country under study, the finding of the study could establish whether the forecasts documented by such survey are accurate or not; and if not, ways to produce more accurate forecasts must be found. 'Rationality' in this paper means that managers in agricultural firms have unbiased expectations and efficiently utilised available information at the time the forecasts are made.
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Unit Root Behaviour in Velocity: Some Evidence from Seven Asian Developing Countries
In: The Indian economic journal, Band 45, Heft 1, S. 54-66
ISSN: 2631-617X
Learning By Doing in Production Function: Evidence on Money as Endogenous Technical Progress
In: The Indian economic journal, Band 40, Heft 1, S. 139-144
ISSN: 2631-617X
Money and its Substitutes in a Developing Economy: Empirical Evidence from Malaysia
In: The Indian economic journal, Band 39, Heft 1, S. 60-73
ISSN: 2631-617X
Do the Home Field, Global Advantage, and Liability of Unfamiliarness Hypotheses Hold? Empirical Evidence from Malaysia
In: Journal of Asia Pacific business, Band 17, Heft 1, S. 4-36
ISSN: 1528-6940
BANKS' TOTAL FACTOR PRODUCTIVITY GROWTH IN A DEVELOPING ECONOMY: DOES GLOBALISATION MATTER?
In: Journal of international development: the journal of the Development Studies Association, Band 26, Heft 6
ISSN: 0954-1748
BANKS' TOTAL FACTOR PRODUCTIVITY GROWTH IN A DEVELOPING ECONOMY: DOES GLOBALISATION MATTER?
In: Journal of international development: the journal of the Development Studies Association, Band 26, Heft 6, S. 821-852
ISSN: 1099-1328
AbstractThe paper provides, for the first time, empirical evidence on the impact of economic globalisation on bank total factor productivity in a developing economy. By employing the Malmquist Productivity Index method, we compute the total factor productivity of the Malaysian banking sector during 1998–2007. Examining different dimensions of economic globalisation, we find evidence supporting for greater trade and capital account restrictions and cultural proximity. On the other hand, personal contacts, information flows, and political globalisation seem to exert significant (negative) influence on banks' total factor productivity levels. Copyright © 2013 John Wiley & Sons, Ltd.
Developments in the efficiency of the Malaysian banking sector: the impacts of financial disruptions and exchange rate regimes
In: Progress in development studies, Band 12, Heft 1, S. 19-46
ISSN: 1477-027X
In the mid-1990s, East Asian countries have experienced severe financial crisis that were followed by deep economic downturns. A variety of methodologies have been used to explain the Asian financial crisis. However, the impact of the Asian financial crisis of 1997 on the efficiency of the banking sector has not been studied yet. The present article attempts to provide new empirical evidence on the efficiency of the Malaysian banking sector around the Asian financial crisis. The efficiency estimates of individual banks are evaluated by using the non-parametric data envelopment analysis (DEA) method. The results indicate that the foreign banks have exhibited higher technical efficiency compared to their domestic bank counterparts. However, the results suggest that the foreign banks were severely affected by the Asian financial crisis, implying that the foreign banks are not insulated from unexpected events like the Asian financial crisis of 1997.
Opening the Black Box on Bank Efficiency in China: Does Economic Freedom Matter?
In: Global economic review, Band 40, Heft 3, S. 269-298
ISSN: 1744-3873
Bank-specific, Industry-specific and Macroeconomic Determinants of Bank Efficiency: Empirical Evidence from the Thai Banking Sector
In: Margin: the journal of applied economic research, Band 4, Heft 4, S. 427-461
ISSN: 0973-8029
This paper examines the efficiency of the Thai banking sector from 1999 to 2008 by using the data envelopment analysis (DEA) method. The results indicate that inefficiency in the sector stems mainly from scale rather than pure technical efficiencies. The findings suggest that small banks are most efficient, while medium-sized banks have been the least efficient banking group. Domestic banks have been relatively more efficient than their foreign bank peers, which can be attributed largely to a higher pure technical efficiency (PTE) level. The results from the multivariate regression analysis suggest that banks with higher loans intensity and which are relatively better capitalised tend to exhibit higher efficiency levels. On the other hand, credit risk is negatively related to bank efficiency. The empirical findings suggest that the recent global financial crisis exerts a negative impact on the efficiency of Thai banks.
Developments in the efficiency of the Thailand banking sector: a DEA approach
In: International journal of development issues, Band 9, Heft 3
ISSN: 1758-8553
Asian Financial Crisis and the Evolution of Korean Banks Efficiency: A DEA Approach
In: Global economic review, Band 38, Heft 4, S. 335-369
ISSN: 1744-3873