This paper considers a version of the Dornbusch model of exchange rate dynamics which allows a nonlinear domestic demand for foreign assets function and imperfect substitutability between domestic and foreign interest bearing assets. Expectations of exchange rate changes are modelled as adaptive...

In this paper we propose a framework for studying possible causes of excess exchange rate volatility. The framework consists of a generalized Dornbusch model of exchange rate dynamics, involving imperfect substitutability between assets, lagged nonlinear protfolio adjustment and les than...

This paper considers a version of the Dornbusch model of exchange rate dynamics which allows a nonlinear domestic demand for foreign assets function and imperfect substitutability between domestic and foreign interest bearing assets. Expectations of exchange rate changes are modelled as adaptive...

In this paper we propose a framework for studying possible causes of excess exchange rate volatility. The framework consists of a generalized Dornbusch model of exchange rate dynamics, involving imperfect substitutability between assets, lagged nonlinear protfolio adjustment and les than...