Breuss, Fritz - In: WIFO Monatsberichte (monthly reports) 82 (2009) 12, pp. 933-941
Inspired by Dornbusch's model of exchange rate overshooting we develop a theory of stock market behaviour. The idea is that stock prices overshoot and undershoot their long-run equilibrium values which are determined by the development in the real economy. The overshooting is triggered primarily...