Dornbusch’s Overshooting Model After Twenty-Five Years

Author/Editor:

Kenneth Rogoff

Publication Date:

February 1, 2002

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This Mundell Fleming lecture at the International Monetary Fund’s 2001 annual research conference marks the 25th anniversary of Rudiger Dornbusch’s masterpiece, “Expectations and Exchange Rate Dynamics,” a seminal contribution to both policy and research in the field of international finance. This essay provides a simple overview of the model as well as some empirics, not only on exchange rates but on measures of the paper’s influence. Last, but not least, I offer some personal reflections on how Dornbusch conveyed the ideas in his “overshooting model” to inspire a generation of students.

Series:

Working Paper No. 2002/039

Subject:

Demand for money Exchange rates Foreign exchange Monetary base Money Prices Rational expectations Real exchange rates Sticky prices

English

Publication Date:

February 1, 2002

ISBN/ISSN:

9781451845846/1018-5941

Stock No:

WPIEA0392002

Pages:

41

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