Dornbusch's Overshooting Model after Twenty-Five Years

41 Pages Posted: 30 Jan 2006

See all articles by Kenneth Rogoff

Kenneth Rogoff

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 2002

Abstract

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

Rogoff, Kenneth S., Dornbusch's Overshooting Model after Twenty-Five Years (February 2002). IMF Working Paper No. 02/39, Available at SSRN: https://ssrn.com/abstract=879418

Kenneth S. Rogoff (Contact Author)

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