Dornbusch's Overshooting Model After Twenty-Five Years

Dornbusch's Overshooting Model After Twenty-Five Years

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This Mundell Fleming lecture at the International Monetary Funda€™s 2001 annual research conference marks the 25th anniversary of Rudiger Dornbuscha€™s masterpiece, a€œExpectations and Exchange Rate Dynamics, a€ 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 papera€™s influence. Last, but not least, I offer some personal reflections on how Dornbusch conveyed the ideas in his a€œovershooting modela€ to inspire a generation of students.At least I was not alone in being unable to answer so many of the questions. ... finance course at MIT is the answer to the trivia question a€œWhen was the last time these guys were completely humiliated in public? ... The ideas in Dombusch ( 1976) have inspired countless students to choose intemational economics as a field.

Title:Dornbusch's Overshooting Model After Twenty-Five Years
Author:Mr. Kenneth Rogoff
Publisher:International Monetary Fund - 2002-02-01


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