RDP 2009-05: Macroeconomic Volatility and Terms of Trade Shocks
Equation (2)
σ
i
t
Y
=
δ
σ
i
t
T
O
T
+
θ
σ
i
t
T
O
T
V
i
t
−
1
+
γ
V
i
t
−
1
+
ψ
Z
i
t
+
μ
i
+
τ
t
+
η
i
t
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