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RDP 2009-01: Currency Misalignments and Optimal Monetary Policy: A Re-examination
Equation (B2)
υ
t
=
2
(
1
1
−
σ
−
1
1
+
ϕ
)
C
1
−
σ
+
C
1
−
σ
(
c
t
+
c
t
*
)
+
1
−
σ
2
C
1
−
σ
(
(
c
t
)
2
+
(
c
t
*
)
2
)
−
C
1
−
σ
(
n
t
+
n
t
*
)
−
1
+
ϕ
2
C
1
−
σ
(
(
n
t
)
2
+
(
n
t
*
)
2
)
+
o
(
‖
a
3
‖
)
.
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