Front Matter Page
Research Department
Contents
I. Introduction
II. The Overshooting Model in Perspective
A. Still a Useful Policy Tool
B. Overshooting: The Basic Idea
C. Cite Counts and Course Reading Lists
D. Learning from the Master: Life at MIT in Dornbusch’s International Finance Course
III. Theory and Empirics
A. The Data
B. The Model
C. Undershooting
IV. Conclusion
Tables
1. Most Recent Graduate International Finance Reading Lists
2. Variance of the Forward Rate (Δ ft) Divided by Variance of Spot Rate (Δ st)
Figures
1. “Expectations and Exchange Rate Dynamics” Citations
2a. Germany: Real Exchange Rate (RER) and One-year Real Interest Differential
2b. Japan: Real Exchange Rate (RER) and One-year Real Interest Differential
2c. United Kingdom: Real Exchange Rate (RER) and One-year Real Interest Differential
3a. Japan: Spot, 90-days. One-year Forward Rates
3b. Germany: Spot, 90-day. One-year Forward Rates
4. The Mundell-Fleming-Dornbusch Model
5. Overshooting in Response to a Permanent Unanticipated Change in the Money Supply
6. An Example of Undershooting
7a. Thailand: Real Effective Exchange Rate and Current Account Balance
7b. Korea: Real Effective Exchange Rate and Current Account Balance
7c. Indonesia: Real Effective Exchange Rate and Current Account Balance
7d. Mexico: Real Effective Exchange Rate and Current Account Balance
7e. United States: Real Effective Exchange Rate and Current Account Balance
7f. Japan: Real Effective Exchange Rate and Current Account Balance
7g. United Kingdom: Real Effective Exchange Rate and Current Account Balance
References