“The paper develops a simple macroeconomic framework for the study of exchange rate movements. The purpose is to develop a theory that is suggestive of the observed large fluctuations in exchange rates while at the same time establishing that such exchange rate movements are consistent with rational expectations formation. In developing a formal model we draw on the role of asset markets, capital mobility, and expectations that have been emphasized in recent literature.”

Rudiger Dornbusch, "Expectations and exchange rate dynamics." The journal of political economy (1976): 1161-1176. p. 1161

Adopted from Wikiquote. Last update Oct. 25, 2022. History

Help us to complete the source, original and additional information

Do you have more details about the quote "The paper develops a simple macroeconomic framework for the study of exchange rate movements. The purpose is to develop…" by Rudiger Dornbusch?
Rudiger Dornbusch photo
Rudiger Dornbusch 10
German economist 1942–2002

Related quotes

Norman Lamont photo

“What is the right exchange rate at one point is not necessarily the right exchange rate at another.”

Norman Lamont (1942) British politician

As he stated on Channel 4 News, 15th December 2008

Joseph E. Stiglitz photo
Barry Eichengreen photo
Geoffrey Hodgson photo

“Liberal economists conceive of societies as black boxes connected by exchange rates; as long as exchange rates are correct, what goes on inside the black box is regarded as not very important.”

Robert Gilpin (1930–2018) Political scientist

Source: The Political Economy of International Relations (1987), Chapter Ten, Emergent International Economic Order, p. 393

Murray N. Rothbard photo
Thomas Piketty photo
James Meade photo

Related topics