The Determinants and Outcomes of Forward-Looking Disclosure Evidence from Companies listed in Indonesia

The aim of the study was to examine the determinants and outcomes of forward-looking disclosure. The determinants of forward-looking disclosure were solvability, profitability, liquidity, firm size, and sector type. Meanwhile, the outcomes were firm performance and market performance. The population of this research was all companies listed in Indonesia Stock Exchange and published their annual report in the year of 2012-2015. The total samples were 119 companies selected using purposive sampling. The data in this study was analyzed using Multiple regression analysis with SPSS 22. The result of this study demonstrated that profitability, firm size, and sector type positively affected on forward-looking disclosure. Meanwhile, leverage and liquidity negatively affected on forward-looking disclosure. However, there were no influence between forward-looking disclosure to firm performance. The limitation in this study is only focused on financial aspect of the companies. There are non-financial aspects can be used as proxies of firm characteristics and the outcomes of forward-looking disclosure

Testing Myopia in Economic Models

This paper suggests a simple test of whether agents are forward-looking or myopic that can be implemented on the type of backward-looking econometric models that are usually estimated.. We argue that myopic behaviour implies a simple parametric restriction that will not hold if agents are forward-looking. We illustrate our tests by examining price adjustment in the UK using aggregate quarterly data from 1963-1997. Our evidence strongly suggests that pricesetting is forward-looking and not myopic

A New Keynesian IS Curve for Australia: Is it Forward Looking or Backward Looking?

This paper estimates the forward looking, backward looking and an extended version of the New Keynesian IS curve for Australia. The validity of these models is investigated by imposing the constraint on real rate of interest and as well as when the constraint is relaxed. Two measures of output gap viz. GAP1 (constructed using the unobserved components approach) and GAP2 (constructed using a quadratic trend) are utilized. Our results suggest that the baseline backward looking and forward looking models are overwhelmingly rejected by the data. Evidence strongly supports for the extended backward looking model (with GAP2) being relevant for monetary policy analysis.New Keynesian IS curve; Backward looking; Forward looking; Australia

Myopic or constrained by balanced-budget-rules? The intertemporal spending behavior of Norwegian local governments

The paper analyzes the intertemporal spending behavior of Norwegian local governments with particular attention to liquidity constraints imposed by balanced-budget-rules (BBRs). The main findings are: (i) On average, local government spending behavior is neither perfectly forward looking nor fully myopic. (ii) Local governments with good fiscal conditions behave more forward looking than other local governments. (iii) A high degree of party fragmentations is associated with less forward looking behavior. The overall assessment is that the departure from rational forward looking behavior reflects both liquidity constraints imposed by BBRs and myopic behavior.Balanced-budget-rules; Intertemporal spending behavior; Consumption smoothing; Local government

Forward Looking and Myopic Regional Computable General Equilibrium Models. How Significant is the Distinction?

We present a stylized intertemporal forward-looking model able that accommodates key regional economic features, an area where the literature is not well developed. The main difference, from the standard applications, is the role of saving and its implication for the balance of payments. Though maintaining dynamic forward-looking behaviour for agents, the rate of private saving is exogenously determined and so no neoclassical financial adjustment is needed. Also, we focus on the similarities and the differences between myopic and forward-looking models, highlighting the divergences among the main adjustment equations and the resulting simulation outcomes.Myopic and Forward-looking Behaviour, Computable General Equilibrium Models, Regional Adjustment.

Measurement errors in GDP and forward-looking monetary policy: The Swiss case

This paper analyzes forward-looking rules for Swiss monetary policy in a small structural VAR consisting of four variables. First, the paper looks at the ex ante inflation-output-growth volatility trade-off for a forward-looking policy aiming at a convex combination of a strict inflation and output growth targeting rule implied by this SVAR model. Thereby the paper introduces a new analytical method. Second, the paper considers the effect of measurement errors in GDP on this inflation-output-growth volatility trade-off. Third, the paper works at the impact of changing beliefs about the potential growth rate on the variability of output growth and inflation. Finally the effects of different targets in a forward-looking monetary policy on ex post or unconditional volatility of inflation and output growth is explored by a simulation exercise. --Structural VAR,forward-looking monetary policy,efficiency frontier,GDP measurement errors

Some UK evidence on the Forward Looking IS Equation:

This paper seeks to demonstrate that a backward looking specification of the IS curve using UK data can encompass the forward looking model recently discussed by Kara and Nelson (2004). By relaxing the restriction that the interest rate and the inflation rate enter the IS curve with coefficients of equal magnitude but opposite sign, we obtain IS curve estimates which are empirically plausible and which encompass the rival specification.IS curve, forward looking, real interest rate.

Living Rationally Under the Volcano? An Empirical Analysis of Heavy Drinking and Smoking

This study investigates whether models of forward-looking behavior explain the observed patterns of heavy drinking and smoking of men in late middle age in the Health and Retirement Study better than myopic models. We develop and estimate a sequence of nested models which differ by their degree of forward-looking behavior. We also study models which allow for heterogeneity in discounting, and thus test whether certain types of individuals are more likely to show forward-looking behavior than other types. Our empirical findings suggest that forward-looking models with an annual discount factor of approximately 0.78 fit the data the best. These models also dominate other behavioral models based on out-of-sample predictions using data of men aged 70 and over. Myopic models predict rates of smoking and drinking for old individuals which are significantly larger than those found in the data on elderly men.

The Core-Periphery Model with Forward-Looking Expectations

The 'core-periphery model' is vitiated by its assumption of static expectations. That is, migration (inter-regional or intersectoral) is the key to agglomeration, but migrants base their decision on current wage differences alone--even though migration predictably alters wages and workers are (implicitly) infinitely lived. The assumption was necessary for analytic tractability. The model can have multiple stable equilibria, so allowing forward-looking expectations would have forced consideration of the very difficult perhaps even intractable issues of global stability in non-linear dynamic systems. This paper's main contribution is to present a set of solution techniques partly analytic and partly numerical that allow us to consider forward-looking expectations. These techniques reveal a startling result. If quadratic migration costs are sufficiently high, allowing forward-looking behaviour has no impact on the main results, so static expectations are truly an assumption of convenience. If migration costs are lower, however, forward-looking behaviour creates history-vs-expectations considerations. In this case self-fulfilling prophecy.