exchange rate determination. Dornbush's over-shooting hypothesis is the best known explanation of this phenomenon. This paper … exchange rate overshooting to undershooting. Using constrained maximum likelihood methods, the model is estimated for Germany … and the United States. The results provide strong evidence in support of the overshooting hypothesis for the Deutsche Mark …

affect agents' expectations; (iii) we find favorable evidence to Dornbusch's (1976) overshooting hypothesis …

Dornbusch overshooting. The relationship between real interest rates and real commodity prices is also supported empirically …

markets. Fourth, there are no overshooting and predictability reversal puzzles--for any currency--when using exchange rate …

of exchange rate dynamics. We examine the overshooting hypothesis in models which emphasize differential speeds of … exchange rate overshooting is not an intrinsic characteristic of the foreign exchange market and that it depends on a set of … specific assumptions. We also show that the overshooting is not a characteristic of the assumption of perfect foresight nor …

rate. One of the virtues claimed for such exchange rate 'overshooting', however, is its immediate effect on the price level … nominal inertia in both the level of labor costs and their trend or core rate of growth, this early overshooting of the …. Relative to other policies which achieve the same effect on steady-state inflation, exchange rate overshooting brings inflation …

) the delayed overshooting puzzle; ii) the forward discount puzzle (or Fama puzzle); iii) the predictability reversal puzzle …

intervention is not whether there are bankruptcies or not, but whether these can cause a large exchange rate overshooting once the …

We propose a new explanation for the forward-premium and the delayed-overshooting puzzles. Both puzzles arise from a …' regression; delayed overshooting may or may not occur depending upon the persistence of interest rate innovations and the degree …