RDP 2009-01: Currency Misalignments and Optimal Monetary Policy: A Re-examination Equation (B43)

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 ‖ ) . MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaabbeaacaWG5b Waa0baaSqaaiaadshaaeaacqGHxiIkaaGccqGHRaWkdaWcaaqaaiaa igdaaeaacaaIYaaaaiaadMhadaqhaaWcbaGaamiDaaqaaiabgEHiQi aaikdaaaGccqGH9aqpdaWcaaqaaiabe27aUbqaaiaaikdaaaGaam4y amaaDaaaleaacaWG0baabaGaey4fIOcaaOGaey4kaSYaaeWaaeaada WcaaqaaiaaikdaiiaacqWFsislcqaH9oGBaeaacaaIYaaaaaGaayjk aiaawMcaaiaadogadaWgaaWcbaGaamiDaaqabaGccqGHRaWkdaWcaa qaaiabe27aUbqaaiaaikdaaaWaaeWaaeaadaWcaaqaaiaaikdacqWF sislcqaH9oGBaeaacaaIYaaaaaGaayjkaiaawMcaaiaadohadaqhaa WcbaGaamiDaaqaaiabgEHiQaaakiab=jHiTmaalaaabaGaeqyVd4ga baGaaGOmaaaadaqadaqaamaalaaabaGaaGOmaiab=jHiTiabe27aUb qaaiaaikdaaaaacaGLOaGaayzkaaGaam4CamaaBaaaleaacaWG0baa beaaaOqaaiabgUcaRmaalaaabaGaaGymaaqaaiaaikdaaaWaaiWaae aadaWcaaqaaiabe27aUbqaaiaaikdaaaGaam4yamaaDaaaleaacaWG 0baabaGaey4fIOIaaGOmaaaakiabgUcaRmaabmaabaWaaSaaaeaaca aIYaGae8NeI0IaeqyVd4gabaGaaGOmaaaaaiaawIcacaGLPaaacaWG JbWaa0baaSqaaiaadshaaeaacaaIYaaaaOGaey4kaSYaaSaaaeaacq aH9oGBaeaacaaIYaaaamaabmaabaWaaSaaaeaacaaIYaGae8NeI0Ia eqyVd4gabaGaaGOmaaaaaiaawIcacaGLPaaadaahaaWcbeqaaiaaik daaaGccaWGZbWaa0baaSqaaiaadshaaeaacqGHxiIkcaaIYaaaaOGa ey4kaSYaaeWaaeaadaWcaaqaaiabe27aUbqaaiaaikdaaaaacaGLOa GaayzkaaWaaWbaaSqabeaacaaIYaaaaOWaaeWaaeaadaWcaaqaaiaa ikdacqWFsislcqaH9oGBaeaacaaIYaaaaaGaayjkaiaawMcaaiaado hadaqhaaWcbaGaamiDaaqaaiaaikdaaaaakiaawUhacaGL9baaaeaa cqGHRaWkdaWcaaqaaiabe27aUbqaaiaaikdaaaWaiWiGbmaabGaJao acmc4caaqaiWiGcGaJaIOmaiadmc4FsislcWaJasyVd4gabGaJakac mciIYaaaaaGaiWiGwIcacGaJaAzkaaGaam4CamaaDaaaleaacaWG0b aabaGaey4fIOcaaOGaam4yamaaDaaaleaacaWG0baabaGaey4fIOca aOGae8NeI0YaaSaaaeaacqaH9oGBaeaacaaIYaaaamaabmaabaWaaS aaaeaacaaIYaGae8NeI0IaeqyVd4gabaGaaGOmaaaaaiaawIcacaGL PaaacaWGZbWaaSbaaSqaaiaadshaaeqaaOGaam4yamaaBaaaleaaca WG0baabeaakiabgUcaRiaad+gadaqadaqaamaafmaabaGaamyyamaa CaaaleqabaGaaG4maaaaaOGaayzcSlaawQa7aaGaayjkaiaawMcaai aac6caaaaa@C81D@