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RDP 2013-10: Stochastic Terms of Trade Volatility in Small Open Economies
Equation (8)
K
t
+
1
j
=
(
1
−
δ
)
K
t
j
+
(
1
−
ϕ
2
(
I
t
j
I
t
−
1
j
−
1
)
2
)
I
t
j
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