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I’ll always take Gisele Bündchen seriously. She’s apparently the world’s best paid model. But I do not understand why she is insisting in being paid in euros rather than dollars. It seems she believes that the dollar is likely to fall in the short term, between the time a contract is agreed and the money is paid. (In the long term, who cares? She can convert her cash to any currency she likes.) But if the dollar was obviously likely to fall in the short term, wouldn’t it have fallen already, and far enough that further falls were no more likely than a bounce?
A related 3 minute video is here. It’s of me, sorry, not Gisele Bündchen.
But I confess I never mastered the Dornbusch overshooting model. Maybe Gisele has nailed it.
Tim writes about the economics of everyday life. His 