Exchange rate and Foreign reserves for emerging economies with non-vehicle currencies

What is it about?

This paper extends Dornbusch's well known overshooting model to reflect the vulnerability of economies that do not issue vehicle currencies. I introduced foreign reserves into the overshooting model.

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Why is it important?

International economic models often does not consider the big gaps between the economies issuing vehicle currencies and the one issuing non-vehicle currencies. This salient feauture deserves attention and this study contribute to it.