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  • Open Economy Macroeconomics

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    SHAMEENA KHATOON
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    This document discusses overshooting and adjustment periods. It explains that when a rate increases suddenly, it may overshoot its long run equilibrium level before settling down. During the adjustment period, interest rates will typically fall back to their normal levels from the overshoot. The document also mentions completing an interest rate adjustment check during this time.

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    Chapter 15 notes part 2 overshooting

    Original Title

    Open economy macroeconomics

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    This document discusses overshooting and adjustment periods. It explains that when a rate increases suddenly, it may overshoot its long run equilibrium level before settling down. During the adjustment period, interest rates will typically fall back to their normal levels from the overshoot. The document also mentions completing an interest rate adjustment check during this time.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    14 views3 pages

    Open Economy Macroeconomics

    Uploaded by

    SHAMEENA KHATOON
    This document discusses overshooting and adjustment periods. It explains that when a rate increases suddenly, it may overshoot its long run equilibrium level before settling down. During the adjustment period, interest rates will typically fall back to their normal levels from the overshoot. The document also mentions completing an interest rate adjustment check during this time.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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