RDP 9108: Australia's Real Exchange Rate – Is it Explained by the Terms of Trade or by Real Interest Differentials?
Equation
a
(
t
)
=
1
15
(
12
x
(
t
)
+
4
x
(
t
−
1
)
−
x
(
t
+
1
)
)
b
(
t
)
=
7
5
x
(
t
)
−
1
5
x
(
t
+
1
)
−
1
5
x
(
t
−
1
)
c
(
t
)
=
1
15
(
12
x
(
t
)
+
x
(
t
−
1
)
+
4
x
(
t
+
1
)
)
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