RDP 9101: The Effect of Steady Inflation on Interest Rates and the Real Exchange Rate in a World with Free Capital Flows Equation (6′)

\begin{array}{l} i, e ., & F . (i - r^{*} - π) dt = F . Δc . ε dt, & or equivalently, \\ r - r^{*} = ε . Δc, \end{array}