Dornbusch Overshooting ·
Sticky Prices + UIP = Overshoot
un
seel
.com · 1976 model · exchange rate jumps past equilibrium then returns
e
1.00
Stage
—
Beat
—
Exchange rate e
Price level p
Long-run equilibrium
UIP-implied path
▶ Play
←
→
🔇 Unmute
Reset
Un
seel
.com · Dornbusch Overshooting