Skip to content
RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency
Equation (22a)
dw
=
w
[
r
+
Σ
a
j
(
μ
j
−
r
)
+
a
s
+
1
(
r
^
+
μ
e
−
r
)
+
Σ
^
a
s
+
j
(
μ
^
j
+
μ
e
+
σ
^
j
e
−
r
)
−
c
/
w
]
dt
+
w
[
Σ
a
j
σ
j
d
z
j
+
a
s
+
1
σ
e
d
z
e
+
Σ
^
a
s
+
j
(
σ
^
j
d
z
^
j
+
σ
e
d
z
e
)
]
MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaacaWGKb Gaam4Daiabg2da9iaadEhadaWadaqaaiaadkhacqGHRaWkcqGHris5 caWGHbWaaSbaaSqaaiaadQgaaeqaaOWaaeWaaeaacqaH8oqBdaWgaa WcbaGaamOAaaqabaGccqGHsislcaWGYbaacaGLOaGaayzkaaGaey4k aSIaamyyamaaBaaaleaacaWGZbGaey4kaSIaaGymaaqabaGcdaqada qaaiqadkhagaqcaiabgUcaRiabeY7aTnaaBaaaleaacaWGLbaabeaa kiabgkHiTiaadkhaaiaawIcacaGLPaaacqGHRaWkcuGHris5gaqcai aadggadaWgaaWcbaGaam4CaiabgUcaRiaadQgaaeqaaOWaaeWaaeaa cuaH8oqBgaqcamaaBaaaleaacaWGQbaabeaakiabgUcaRiabeY7aTn aaBaaaleaacaWGLbaabeaakiabgUcaRiqbeo8aZzaajaWaaSbaaSqa aiaadQgacaWGLbaabeaakiabgkHiTiaadkhaaiaawIcacaGLPaaacq GHsislcaWGJbGaai4laiaadEhaaiaawUfacaGLDbaacaWGKbGaamiD aaqaaiabgUcaRiaadEhadaWadaqaaiabggHiLlaadggadaWgaaWcba GaamOAaaqabaGccqaHdpWCdaWgaaWcbaGaamOAaaqabaGccaWGKbGa amOEamaaBaaaleaacaWGQbaabeaakiabgUcaRiaadggadaWgaaWcba Gaam4CaiabgUcaRiaaigdaaeqaaOGaeq4Wdm3aaSbaaSqaaiaadwga aeqaaOGaamizaiaadQhadaWgaaWcbaGaamyzaaqabaGccqGHRaWkcu GHris5gaqcaiaadggadaWgaaWcbaGaam4CaiabgUcaRiaadQgaaeqa aOWaaeWaaeaacuaHdpWCgaqcamaaBaaaleaacaWGQbaabeaakiaads gaceWG6bGbaKaadaWgaaWcbaGaamOAaaqabaGccqGHRaWkcqaHdpWC daWgaaWcbaGaamyzaaqabaGccaWGKbGaamOEamaaBaaaleaacaWGLb aabeaaaOGaayjkaiaawMcaaaGaay5waiaaw2faaaaaaa@9BF2@