RDP 2009-01: Currency Misalignments and Optimal Monetary Policy: A Re-examination Equation

1 σ 2 ( c ˜ t 2 + c ˜ t 2 ) 1 + ϕ 2 ( n ˜ t 2 + n ˜ t 2 ) + ( 1 σ ) ( c ¯ t c ˜ t + c ¯ t c ˜ t ) ( 1 + ϕ ) ( n ¯ t n ˜ t + n ¯ t n ˜ t ) . MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaWaaSaaaeaaca aIXaaccaGae8NeI0Iaeq4WdmhabaGaaGOmaaaadaqadaqaaiqadoga gaacamaaDaaaleaacaWG0baabaGaaGOmaaaakiabgUcaRiqadogaga acamaaDaaaleaacaWG0baabaGaey4fIOIaaGOmaaaaaOGaayjkaiaa wMcaaiab=jHiTmaalaaabaGaaGymaiabgUcaRiabew9aMbqaaiaaik daaaWaaeWaaeaaceWGUbGbaGaadaqhaaWcbaGaamiDaaqaaiaaikda aaGccqGHRaWkceWGUbGbaGaadaqhaaWcbaGaamiDaaqaaiabgEHiQi aaikdaaaaakiaawIcacaGLPaaacqGHRaWkcaGGOaGaaGymaiab=jHi Tiabeo8aZjaacMcadaqadaqaaiqadogagaqeamaaBaaaleaacaWG0b aabeaakiqadogagaacamaaBaaaleaacaWG0baabeaakiabgUcaRiqa dogagaqeamaaDaaaleaacaWG0baabaGaey4fIOcaaOGabm4yayaaia Waa0baaSqaaiaadshaaeaacqGHxiIkaaaakiaawIcacaGLPaaacqWF sislcaGGOaGaaGymaiabgUcaRiabew9aMjaacMcadaqadaqaaiqad6 gagaqeamaaBaaaleaacaWG0baabeaakiqad6gagaacamaaBaaaleaa caWG0baabeaakiabgUcaRiqad6gagaqeamaaDaaaleaacaWG0baaba Gaey4fIOcaaOGabmOBayaaiaWaa0baaSqaaiaadshaaeaacqGHxiIk aaaakiaawIcacaGLPaaacaGGUaaaaa@77A8@