RDP 2007-06: The Butterfly Effect of Small Open Economies
Equation (2)
x
t
∗
=
E
t
x
t
+
1
∗
−
1
σ
(
r
t
∗
−
E
t
π
t
+
1
∗
)
−
ϕ
1
(
1
−
ρ
a
*
)
a
t
∗
+
1
−
ρ
x
∗
σ
ν
x
,
t
∗
MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaGaamiEamaaDa aaleaacaWG0baabaGaey4fIOcaaOGaeyypa0JaamyramaaBaaaleaa caWG0baabeaakiaadIhadaqhaaWcbaGaamiDaiabgUcaRiaaigdaae aacqGHxiIkaaaccaGccqWFsisldaWcaaqaaiaaigdaaeaacqaHdpWC aaWaaeWaaeaacaWGYbWaa0baaSqaaiaadshaaeaacqGHxiIkaaGccq WFsislcaWGfbWaaSbaaSqaaiaadshaaeqaaOGaeqiWda3aa0baaSqa aiaadshacqGHRaWkcaaIXaaabaGaey4fIOcaaaGccaGLOaGaayzkaa Gae8NeI0Iaeqy1dy2aaSbaaSqaaiaaigdaaeqaaOWaaeWaaeaacaaI XaGae8NeI0IaeqyWdi3aa0baaSqaaiaadggaaeaacaGGQaaaaaGcca GLOaGaayzkaaGaamyyamaaDaaaleaacaWG0baabaGaey4fIOcaaOGa ey4kaSYaaSaaaeaacaaIXaGae8NeI0IaeqyWdi3aa0baaSqaaiaadI haaeaacqGHxiIkaaaakeaacqaHdpWCaaGaeqyVd42aa0baaSqaaGqa ciaa+HhacaGGSaGaamiDaaqaaiabgEHiQaaaaaa@6C51@