Exchange rate overshooting in Turkey

Exchange rate overshooting is said to be a short-run phenomenon. However, w hen a currency like Turkish lira depreciates from 13 to almost 400 000 bra per dollar over three decades, one wonders whether it has overshot its long -run value as well, In this paper we employ a relatively new method of erro r-correction modeling to show how one could test for overshooting in the sh ort-run as well as in the long-run. (C) 2000 Elsevier Science S.A. All righ ts reserved. JEL classification: F31.