RDP 2009-01: Currency Misalignments and Optimal Monetary Policy: A Re-examination Equation (B46)

c t + c t ∗ = y t + y t ∗ − ν 2 ( 2 − ν 2 ) ( ( 1 − ν ) ( 1 − σ ) D ) 2 ( y t − y t ∗ ) 2 − ν 2 ( 2 − ν 2 ) 1 D 2 Δ t 2 − ν 2 ( 2 − ν 2 ) ( 2 ( 1 − ν ) ( 1 − σ ) D 2 ) Δ t ( y t − y t ∗ ) + o ( ‖ a 3 ‖ ) . MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaacaWGJb WaaSbaaSqaaiaadshaaeqaaOGaey4kaSIaam4yamaaDaaaleaacaWG 0baabaGaey4fIOcaaOGaeyypa0JaamyEamaaBaaaleaacaWG0baabe aakiabgUcaRiaadMhadaqhaaWcbaGaamiDaaqaaiabgEHiQaaaiiaa kiab=jHiTmaalaaabaGaeqyVd4gabaGaaGOmaaaadaqadaqaamaala aabaGaaGOmaiab=jHiTiabe27aUbqaaiaaikdaaaaacaGLOaGaayzk aaWaaeWaaeaadaWcaaqaaiaacIcacaaIXaGae8NeI0IaeqyVd4Maai ykaiaacIcacaaIXaGae8NeI0Iaeq4WdmNaaiykaaqaaiaadseaaaaa caGLOaGaayzkaaWaaWbaaSqabeaacaaIYaaaaOWaaeWaaeaacaWG5b WaaSbaaSqaaiaadshaaeqaaOGae8NeI0IaamyEamaaDaaaleaacaWG 0baabaGaey4fIOcaaaGccaGLOaGaayzkaaWaaWbaaSqabeaacaaIYa aaaaGcbaGae8NeI0YaaSaaaeaacqaH9oGBaeaacaaIYaaaamaabmaa baWaaSaaaeaacaaIYaGae8NeI0IaeqyVd4gabaGaaGOmaaaaaiaawI cacaGLPaaadaWcaaqaaiaaigdaaeaacaWGebWaaWbaaSqabeaacaaI YaaaaaaaiiGakiab+r5aenaaDaaaleaacaWG0baabaGaaGOmaaaaki ab=jHiTmaalaaabaGaeqyVd4gabaGaaGOmaaaadaqadaqaamaalaaa baGaaGOmaiab=jHiTiabe27aUbqaaiaaikdaaaaacaGLOaGaayzkaa WaaeWaaeaadaWcaaqaaiaaikdacGaJakikaiacmciIXaGamWiG=jHi TiadmciH9oGBcGaJakykaiaacIcacaaIXaGae8NeI0Iaeq4WdmNaai ykaaqaaiaadseadaahaaWcbeqaaiaaikdaaaaaaaGccaGLOaGaayzk aaGae4hLdq0aaSbaaSqaaiaadshaaeqaaOGaaiikaiaadMhadaWgaa WcbaGaamiDaaqabaGccqWFsislcaWG5bWaa0baaSqaaiaadshaaeaa cqGHxiIkaaGccaGGPaGaey4kaSIaam4BamaabmaabaWaauWaaeaaca WGHbWaaWbaaSqabeaacaaIZaaaaaGccaGLjWUaayPcSdaacaGLOaGa ayzkaaGaaiOlaaaaaa@9FDF@