RDP 2009-01: Currency Misalignments and Optimal Monetary Policy: A Re-examination
Equation (B42)
y
t
+
1
2
y
t
2
=
ν
2
c
t
+
(
2
−
ν
2
)
c
t
∗
+
ν
2
(
2
−
ν
2
)
s
t
−
ν
2
(
2
−
ν
2
)
s
t
∗
+
1
2
{
ν
2
c
t
2
+
(
2
−
ν
2
)
c
t
∗
2
+
ν
2
(
2
−
ν
2
)
2
s
t
2
+
(
ν
2
)
2
(
2
−
ν
2
)
s
t
∗
2
}
+
ν
2
(
2
−
ν
2
)
s
t
c
t
−
ν
2
(
2
−
ν
2
)
s
t
∗
c
t
∗
+
o
(
‖
a
3
‖
)
,
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