Overshooting models of the exchange rate are an attempt to explain:

Question

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Overshooting models of the exchange rate, developed by economists such as Rudi Dornbusch, attempt to explain why exchange rates are more volatile than differences in national price levels or interest rates would suggest. These models suggest that in response to a change in monetary policy, exchange rates will initially "overshoot" their long-term equilibrium value before eventually settling at that value, contributing to their observed volatility.

Overshooting Models of the Exchange Rate Are an Attempt to Explain