Imperfect Foresight and the Insulation Properties of a Flexible Exchange Rate
用一个简单的资产市场模型，调和了Dornbusch和Floyd关于浮动汇率能否隔离外国价格冲击的相反结论，发现隔离通常不完全，且他们的结论只在特殊情况下成立。
Using a simple asset market model, this paper reconciles the contradictory conclusions of Dornbusch and Floyd concerning the extent to which flexible exchange rates insulate a small open economy from increases in the foreign price level. To derive these results, the paper uses a more general expectations hypothesis, called imperfect foresight, that allows for errors in asset holders' initial forecasts of the long-run implications of current disturbances. Insulation is shown to be, in general, incomplete, and the earlier conclusions of Dornbusch and Floyd about the degree of insulation are shown to hold only in special cases.