Dinero e inflación: el overshooting y el canal del tipo de cambio

Waldo Mendoza and Ricardo Huaman

No 2005-238, Documentos de Trabajo / Working Papers from Departamento de Economía - Pontificia Universidad Católica del Perú

Abstract: In this paper we extend the Dornbusch´s model (1976), the overshooting of the exchange rate, in two directions. First, as it was modeled by Wilson (1979), we assume that agents have rational expectations, i.e. perfect foresight in a deterministic model. In this framework, we analyze the effects of unanticipated and anticipated economic policies. Second, this model tries to reproduce the stylized fact that, in an opened economy under a regime of flexible exchange rate, the impact of an expansionary monetary policy over prices can be immediate, through the effect in the exchange rate. With this goal, the Dornbusch´s original model has been extended to take into account the depreciation rate of the exchange rate, as an argument of the Phillip´s Curve. In this extension we assume, as in the basic model, that there is no adjustment in prices due to the excess of demand in the good market, in the short run; while the adjustment that is generated by the movement of the exchange rate is instantaneous.

Pages: 88 pages
Date: 2005
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