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RDP 2009-01: Currency Misalignments and Optimal Monetary Policy: A Re-examination
Equation (B45)
c
t
2
+
c
t
∗
2
+
ν
(
2
−
ν
2
)
s
t
2
=
y
t
2
+
y
t
∗
2
+
ν
(
2
−
ν
2
)
(
(
1
−
ν
)
(
1
−
σ
)
D
)
2
(
y
t
−
y
t
∗
)
2
u
+
ν
(
2
−
ν
2
)
1
D
2
Δ
t
2
+
ν
(
2
−
ν
2
)
(
2
(
1
−
ν
)
(
1
−
σ
)
D
2
)
Δ
t
(
y
t
−
y
t
∗
)
+
o
(
‖
a
3
‖
)
.
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