RDP 2007-06: The Butterfly Effect of Small Open Economies
Equation (25)
(
Γ
0
∗
0
Γ
0
21
Γ
0
22
)
(
y
t
*
y
t
)
=
(
Γ
1
∗
0
Γ
1
21
Γ
1
22
)
(
y
t
−
1
*
y
t
−
1
)
+
(
Ψ
∗
0
Ψ
21
Ψ
22
)
(
ε
t
∗
ε
t
)
+
(
Π
∗
0
Π
21
Π
22
)
(
η
t
∗
η
t
)
.
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