Dornbusch’s Overshooting Model After Twenty-Five Years
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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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