Dornbusch’s Overshooting Model After Twenty-Five Years
IMF Working Papers, February 1, 2002
Source details
- Canonical URL
- Dornbusch’s Overshooting Model After Twenty-Five Years
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Bibliographic details
- Authors: Kenneth Rogoff
- Published: February 1, 2002
- Series: IMF Working Papers
Overview
- Mundell Fleming lecture at the International Monetary Fund’s 2001 annual research conference marking the 25th anniversary of Rudiger Dornbusch’s “Expectations and Exchange Rate Dynamics.”
- Essay by Kenneth Rogoff provides:
- A simple overview of Dornbusch’s overshooting model.
- Some empirics on exchange rates.
- Measures of the paper’s influence.
- Personal reflections on Dornbusch’s pedagogy and influence on a generation of students.
Key themes and findings
- The paper is presented as a seminal contribution to both policy and research in international finance.
- Focus areas highlighted:
- Expectations and exchange rate dynamics as central to understanding exchange rate behavior.
- The role of sticky prices in generating exchange rate overshooting.
- The interaction between monetary factors (monetary base, money demand) and real exchange rates.
Empirics and measures of influence
- The essay includes:
- Empirical analysis not only on exchange rates but also on measures of the original paper’s influence.
- Qualitative and anecdotal reflections on how Dornbusch conveyed ideas and inspired students.
Subjects and keywords (as listed)
- Subjects:
- Demand for money, Exchange rates, Foreign exchange, Monetary base, Money, Prices, Rational expectations, Real exchange rates, Sticky prices
- Keywords:
- Demand for money, Dornbusch model, Europe, exchange rate, exchange rates, forward rate, international economics, Monetary base, money demand, Overshooting, overshooting paper, rational expectations reformulation, Real exchange rates, Sticky prices, thought experiment, variant Dornbusch, WP