Overshooting model - Wikipedia The overshooting model, or the exchange rate overshoot hypothesis, first developed by economist Rudi Dornbusch, is a theoretical explanation for high levels of exchange rate volatility
Overshooting: What It Is, How It works, and Examples Overshooting in economics explains the high volatility observed in currency exchange rates The overshooting model posits that exchange rates initially overreact to changes in monetary policy due to sticky prices in the economy
Overshooting Model Definition Examples - Quickonomics The Overshooting Model is a concept in international economics that explains how exchange rates initially react to changes in monetary policy more than is necessary, before eventually settling to a new equilibrium
Overshooting Model (Dornbusch) - Definition, Exchange Rate The overshooting model is an economic model that describes the excessive volatility of currency in the short run compared to long-run equilibrium It suggests addressing the forward discount puzzle while keeping an eye on excessive levels of exchange rate volatility
Exchange Rate Overshooting Definition Examples - Quickonomics Exchange rate overshooting is a phenomenon in the context of international finance where the exchange rate initially reacts more strongly to a change in monetary policy or the economic environment than it does in the long run