RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency Equation (17a)

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