Einkommenseffekte, Wechselkursdynamik und der Euro/Dollar-Kurs / Income Effects, Exchange Rate Dynamics, and the Euro/Dollar Rate

Jarchow Hans-Joachim ()
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Jarchow Hans-Joachim: Universität Göttingen, Volkswirtschaftliches Seminar, Platz der Göttinger Sieben, D-37073 Göttingen. Tel.: ++49/+551/39 72 97, Fax: ++49/+551/392054

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2002, vol. 222, issue 4, 421-439

Abstract: This contribution extends the well known Dornbusch-model with a sluggish adjustment of prices and an overshooting of exchange rates by endogenizing macroeconomic supply and by expanding the framework in a two-country setting. It is shown, first, that an expansive impact on demand in the foreign country (e. g. relating to foreign consumption or investment) leads to a real und nominal depreciation of the domestic currency. Second, an expansive impact on foreign supply (e. g. to increased foreign labor productivity) brings about a real appreciation of the domestic currency, while its nominal external value may increase, fall or remain constant. The first impact always goes along with an overshooting, while this may also arise in a case of the second impact. If the first impact dominates over the second (which appears to be true for the USA between the first quarter of 1999 until the third quarter of 2000) the implications of the model are in line with the real and nominal depreciation of the Euro towards the Dollar.

Keywords: Income effects; Euro/Dollar rate; rational exchange rate expectations; overshooting of exchange rates; exchange rate dynamics; Einkommenseffekte; Euro/Dollar-Kurs; rationale Wechselkurserwartungen; überschießende Wechselkursreaktion; Wechselkursdynamik; Income effects; Euro/Dollar rate; rational exchange rate expectations; overshooting of exchange rates; exchange rate dynamics (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:222:y:2002:i:4:p:421-439

DOI: 10.1515/jbnst-2002-0403

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