RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency
Equation (18a)
dw
=
w
[
r
+
a
(
r
^
+
μ
e
+
σ
^
1
e
−
r
)
−
c
/
w
]
dt
+
w
[
σ
1
d
z
1
+
a
(
σ
e
d
z
e
+
σ
^
1
d
z
^
1
−
σ
1
d
z
1
)
]
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