RDP 2009-01: Currency Misalignments and Optimal Monetary Policy: A Re-examination
Equation
π
t
R
=
δ
(
ν
−
1
)
1
+
σ
ξ
δ
−
β
ρ
(
μ
t
−
μ
t
∗
)
π
t
W
=
δ
1
+
σ
ξ
δ
−
β
ρ
(
μ
t
+
μ
t
∗
)
y
˜
t
W
=
−
ξ
π
t
W
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