RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency Equation (10b)

\begin{array}{l} {\hat{μ}}_{1} \equiv \hat{r} & {\hat{σ}}_{i} d {\hat{z}}_{1} \equiv 0 \\ {\hat{μ}}_{2} \equiv (r - μ_{e} + σ_{e}^{2}) & {\hat{σ}}_{2} d {\hat{z}}_{2} \equiv - σ_{e} d z_{e} \end{array}