Bodart, VincentDoraghi, MehrdaadMehrdaadDoraghi2025-05-142025-05-142025-05-142020https://hdl.handle.net/2078.2/21682This master thesis will try to analyse the behaviour of the exchange rate following an exogenous shock. As an addition to the classical exchange rate regression equation used in the literature, we will add an additional exogenous variable to the regression, namely the commodity price index, justified by the countries of analysis chosen: Canada, Chile and Mexico. The purpose is to see if the overshooting phenomenon described by Dornbusch (1976) holds after an exogenous shock or not, meaning if the exchange rate shows a stronger reaction in short-term than its long-run equilibrium. To do so, two econometric approaches will be used, the Local Projection (LP) and the Autoregressive-Distributed Lag (ARDL), and comparisons of the results will be done. One important result obtained from the two approaches is that following an commodity price shock, there is no overshooting of the exchange rate observed.Exchange rateOvershootingCommodity currencyLocal ProjectionARDLtext::thesis::master thesisthesis:26230