RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency
Equation (22a)
dw
=
w
[
r
+
Σ
a
j
(
μ
j
−
r
)
+
a
s
+
1
(
r
^
+
μ
e
−
r
)
+
Σ
^
a
s
+
j
(
μ
^
j
+
μ
e
+
σ
^
j
e
−
r
)
−
c
/
w
]
dt
+
w
[
Σ
a
j
σ
j
d
z
j
+
a
s
+
1
σ
e
d
z
e
+
Σ
^
a
s
+
j
(
σ
^
j
d
z
^
j
+
σ
e
d
z
e
)
]
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