Dornbusch's Overshooting Model after Twenty-Five Years
41 Pages Posted: 30 Jan 2006
Date Written: February 2002
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.
Keywords: Overshooting, exchange rates
JEL Classification: F-31, F-41
Suggested Citation: Suggested Citation