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RDP 2001-04: Measuring the Real Exchange Rate: Pitfalls and Practicalities
Equation (7)
Δ
r
e
r
t
=
β
1
+
β
2
r
e
r
t
−
1
+
β
3
t
o
t
+
β
4
(
r
t
−
1
−
r
t
−
1
∗
)
+
β
5
Δ
t
o
t
t
+
ε
t
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