RDP 9006: Wage Contracts, Sticky Prices and Exchange Rate Volatility: Evidence from Nine Industrial Countries Equation (9c)

Min θ E t1 { δ [ ( ( w 1 t t1 p t ) t1 ( w 1 t t1 p t ) )( ( w 1 t t1 p t ) O t1 ( w 1 t t1 p t ) O ) ] 2 + δ 2 [ ( ( w 1 t+1 t p t+1 ) t1 ( w 1 t+1 t p t+1 ) )( ( w 1 t+1 t p t+1 ) O t1 ( w 1 t+1 t p t+1 ) O ) ] 2 }. MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaadaWfqa qaaiaab2eacaqGPbGaaeOBaiaaykW7caaMc8oaleaacqaH4oqCaeqa aOGaaeyramaaBaaaleaacaqG0bGaeyOeI0IaaGymaaqabaGcdaGaba qaaiabes7aKnaadmaabaWaaeWaaeaadaqadaqaaiaabEhadaahaaWc beqaaiaaigdaaaGcdaWgaaWcbaGaaeiDaaqabaGccqGHsisldaWgaa WcbaGaaeiDaiabgkHiTiaaigdaaeqaaOGaaeiCamaaBaaaleaacaqG 0baabeaaaOGaayjkaiaawMcaaiabgkHiTmaaBaaaleaacaqG0bGaey OeI0IaaGymaaqabaGcdaqadaqaaiaabEhadaahaaWcbeqaaiaaigda aaGcdaWgaaWcbaGaaeiDaaqabaGccqGHsisldaWgaaWcbaGaaeiDai abgkHiTiaaigdaaeqaaOGaaeiCamaaBaaaleaacaqG0baabeaaaOGa ayjkaiaawMcaaaGaayjkaiaawMcaaiabgkHiTmaabmaabaWaaeWaae aacaqG3bWaaWbaaSqabeaacaaIXaaaaOWaaSbaaSqaaiaabshaaeqa aOGaeyOeI0YaaSbaaSqaaiaabshacqGHsislcaaIXaaabeaakiaabc hadaWgaaWcbaGaaeiDaaqabaaakiaawIcacaGLPaaadaahaaWcbeqa aiaab+eaaaGccqGHsisldaWgaaWcbaGaaeiDaiabgkHiTiaaigdaae qaaOWaaeWaaeaacaqG3bWaaWbaaSqabeaacaaIXaaaaOWaaSbaaSqa aiaabshaaeqaaOGaeyOeI0YaaSbaaSqaaiaabshacqGHsislcaaIXa aabeaakiaabchadaWgaaWcbaGaaeiDaaqabaaakiaawIcacaGLPaaa daahaaWcbeqaaiaab+eaaaaakiaawIcacaGLPaaaaiaawUfacaGLDb aadaahaaWcbeqaaiaaikdaaaaakiaawUhaaaqaamaaciaabaGaey4k aSIaeqiTdq2aaWbaaSqabeaacaaIYaaaaOWaamWaaeaadaqadaqaam aabmaabaGaae4DamaaCaaaleqabaGaaGymaaaakmaaBaaaleaacaqG 0bGaey4kaSIaaGymaaqabaGccqGHsisldaWgaaWcbaGaaeiDaaqaba GccaqGWbWaaSbaaSqaaiaabshacqGHRaWkcaaIXaaabeaaaOGaayjk aiaawMcaaiabgkHiTmaaBaaaleaacaqG0bGaeyOeI0IaaGymaaqaba GcdaqadaqaaiaabEhadaahaaWcbeqaaiaaigdaaaGcdaWgaaWcbaGa aeiDaiabgUcaRiaaigdaaeqaaOGaeyOeI0YaaSbaaSqaaiaabshaae qaaOGaaeiCamaaBaaaleaacaqG0bGaey4kaSIaaGymaaqabaaakiaa wIcacaGLPaaaaiaawIcacaGLPaaacqGHsisldaqadaqaamaabmaaba Gaae4DamaaCaaaleqabaGaaGymaaaakmaaBaaaleaacaqG0bGaey4k aSIaaGymaaqabaGccqGHsisldaWgaaWcbaGaaeiDaaqabaGccaqGWb WaaSbaaSqaaiaabshacqGHRaWkcaaIXaaabeaaaOGaayjkaiaawMca amaaCaaaleqabaGaae4taaaakiabgkHiTmaaBaaaleaacaqG0bGaey OeI0IaaGymaaqabaGcdaqadaqaaiaabEhadaahaaWcbeqaaiaaigda aaGcdaWgaaWcbaGaaeiDaiabgUcaRiaaigdaaeqaaOGaeyOeI0YaaS baaSqaaiaabshaaeqaaOGaaeiCamaaBaaaleaacaqG0bGaey4kaSIa aGymaaqabaaakiaawIcacaGLPaaadaahaaWcbeqaaiaab+eaaaaaki aawIcacaGLPaaaaiaawUfacaGLDbaadaahaaWcbeqaaiaaikdaaaaa kiaaw2haaiaac6caaaaa@C4BA@