Some Notes on Overshooting

Stefan Homburg

EconStor Open Access Articles and Book Chapters, 1989, vol. 109, issue 3, 443-447

Abstract: Using two examples we have shown that large fluctuations in real exchange rates cannot normally be attributed to "overshooting" in the Dornbusch sense. We proposed to use the interest differential between to countries as a direct and reliable measure of the extend of overshooting. Observing that differential immediately reveals that the past appreciation of the dollar against the mark has hardly anything to do with overshooting.

Keywords: Exchange Rate; Overshooting (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
Date: 1989
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