Skip to content
RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency
Equation
0
=
(
a
^
s
^
+
1
+
Σ
a
^
s
^
+
j
)
a
^
i
a
^
s
^
+
k
e
w
^
+
(
1
−
a
s
+
1
−
Σ
^
a
s
+
j
)
a
s
+
i
a
k
w
i
=
2
,
…
,
s
^
and
k
=
2
,
…
,
s
0
=
(
a
^
s
^
+
1
+
Σ
a
^
s
^
+
j
)
a
^
i
(
1
−
a
^
s
^
+
1
−
Σ
a
^
s
^
+
j
)
e
w
^
+
(
1
−
a
s
+
1
−
Σ
^
a
s
+
j
)
a
s
+
i
(
a
s
+
1
+
Σ
^
a
s
+
j
)
w
i
=
2
,
…
,
s
^
0
=
(
a
^
s
^
+
1
+
Σ
a
^
s
^
+
j
)
a
^
i
a
^
k
e
w
^
+
(
1
−
a
s
+
1
−
S
^
a
s
+
1
)
a
s
+
i
a
s
+
k
w
i
=
2
,
…
,
s
^
and
k
=
2
,
…
,
s
^
MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaacaaIWa Gaeyypa0JaaiikaiqadggagaqcamaaBaaaleaaceWGZbGbaKaacqGH RaWkcaaIXaaabeaakiabgUcaRiabfo6atjqadggagaqcamaaBaaale aaceWGZbGbaKaacqGHRaWkcaWGQbaabeaakiaacMcaceWGHbGbaKaa daWgaaWcbaGaamyAaaqabaGcceWGHbGbaKaadaWgaaWcbaGabm4Cay aajaGaey4kaSIaam4AaaqabaGccaWGLbGabm4DayaajaGaey4kaSIa aiikaiaaigdacqGHsislcaWGHbWaaSbaaSqaaiaadohacqGHRaWkca aIXaaabeaakiabgkHiTiqbfo6atzaajaGaamyyamaaBaaaleaacaWG ZbGaey4kaSIaamOAaaqabaGccaGGPaGaamyyamaaBaaaleaacaWGZb Gaey4kaSIaamyAaaqabaGccaWGHbWaaSbaaSqaaiaadUgaaeqaaOGa am4DaaqaauaabeqabmaaaeaacaWGPbGaeyypa0JaaGOmaiaacYcacq WIMaYscaGGSaGabm4CayaajaaabaGaaeyyaiaab6gacaqGKbaabaGa am4Aaiabg2da9iaaikdacaGGSaGaeSOjGSKaaiilaiaadohaaaaaba GaaGimaiabg2da9iaacIcaceWGHbGbaKaadaWgaaWcbaGabm4Cayaa jaGaey4kaSIaaGymaaqabaGccqGHRaWkcqqHJoWuceWGHbGbaKaada WgaaWcbaGabm4CayaajaGaey4kaSIaamOAaaqabaGccaGGPaGabmyy ayaajaWaaSbaaSqaaiaadMgaaeqaaOGaaiikaiaaigdacqGHsislce WGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey4kaSIaaGymaaqabaGc cqGHsislcqqHJoWuceWGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey 4kaSIaamOAaaqabaGccaGGPaGaamyzaiqadEhagaqcaiabgUcaRiaa cIcacaaIXaGaeyOeI0IaamyyamaaBaaaleaacaWGZbGaey4kaSIaaG ymaaqabaGccqGHsislcuqHJoWugaqcaiaadggadaWgaaWcbaGaam4C aiabgUcaRiaadQgaaeqaaOGaaiykaiaadggadaWgaaWcbaGaam4Cai abgUcaRiaadMgaaeqaaOGaaiikaiaadggadaWgaaWcbaGaam4Caiab gUcaRiaaigdaaeqaaOGaey4kaSIafu4OdmLbaKaacaWGHbWaaSbaaS qaaiaadohacqGHRaWkcaWGQbaabeaakiaacMcacaWG3baabaGaamyA aiabg2da9iaaikdacaGGSaGaeSOjGSKaaiilaiqadohagaqcaaqaai aaicdacqGH9aqpcaGGOaGabmyyayaajaWaaSbaaSqaaiqadohagaqc aiabgUcaRiaaigdaaeqaaOGaey4kaSIaeu4OdmLabmyyayaajaWaaS baaSqaaiqadohagaqcaiabgUcaRiaadQgaaeqaaOGaaiykaiqadgga gaqcamaaBaaaleaacaWGPbaabeaakiqadggagaqcamaaBaaaleaaca WGRbaabeaakiaadwgaceWG3bGbaKaacqGHRaWkcaGGOaGaaGymaiab gkHiTiaadggadaWgaaWcbaGaam4CaiabgUcaRiaaigdaaeqaaOGaey OeI0Iabm4uayaajaGaamyyamaaBaaaleaacaWGZbGaey4kaSIaaGym aaqabaGccaGGPaGaamyyamaaBaaaleaacaWGZbGaey4kaSIaamyAaa qabaGccaWGHbWaaSbaaSqaaiaadohacqGHRaWkcaWGRbaabeaakiaa dEhaaeaafaqabeqadaaabaGaamyAaiabg2da9iaaikdacaGGSaGaeS OjGSKaaiilaiqadohagaqcaaqaaiaabggacaqGUbGaaeizaaqaaiaa dUgacqGH9aqpcaaIYaGaaiilaiablAciljaacYcaceWGZbGbaKaaaa aaaaa@EB4B@