RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency Equation

0=( 1 a ^ s ^ +1 Σ a ^ s ^ +j ) a ^ s ^ +i a ^ s ^ +k e ^ w+( a s+i + ^ Σ a s+j ) a i a k w i=2,,s and k=2,,s 0=(1 a ^ s ^ +1 Σ a ^ s ^ +j ) a ^ s ^ +i (1 a ^ s ^ +1 Σ a ^ s ^ +j )e w ^ +( a s+1 + Σ ^ a s+j ) a i ( a s+1 + Σ ^ a s+j )w i=2,,s 0=(1 a ^ s ^ +1 Σ a ^ s ^ +j ) a ^ s ^ +i a ^ k e w ^ +( a s+1 + Σ ^ a s+j ) a i a s+k w i=2,,s and k=2,, s ^ MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaacaaIWa Gaeyypa0ZaaeWaaeaacaaIXaGaeyOeI0IabmyyayaajaWaaSbaaSqa aiqadohagaqcaiabgUcaRiaaigdaaeqaaOGaeyOeI0Iaeu4OdmLabm yyayaajaWaaSbaaSqaaiqadohagaqcaiabgUcaRiaadQgaaeqaaaGc caGLOaGaayzkaaGabmyyayaajaWaaSbaaSqaaiqadohagaqcaiabgU caRiaadMgaaeqaaOGabmyyayaajaWaaSbaaSqaaiqadohagaqcaiab gUcaRiaadUgaaeqaaOGabmyzayaajaGaam4DaiabgUcaRmaabmaaba GaamyyamaaBaaaleaacaWGZbGaey4kaSIaamyAaaqabaGccuGHRaWk gaqcaiabfo6atjaadggadaWgaaWcbaGaam4CaiabgUcaRiaadQgaae qaaaGccaGLOaGaayzkaaGaamyyamaaBaaaleaacaWGPbaabeaakiaa dggadaWgaaWcbaGaam4AaaqabaGccaWG3baabaqbaeqabeWaaaqaai aadMgacqGH9aqpcaaIYaGaaiilaiablAciljaacYcacaWGZbaabaGa aeyyaiaab6gacaqGKbaabaGaam4Aaiabg2da9iaaikdacaGGSaGaeS OjGSKaaiilaiaadohaaaaabaGaaGimaiabg2da9iaacIcacaaIXaGa eyOeI0IabmyyayaajaWaaSbaaSqaaiqadohagaqcaiabgUcaRiaaig daaeqaaOGaeyOeI0Iaeu4OdmLabmyyayaajaWaaSbaaSqaaiqadoha gaqcaiabgUcaRiaadQgaaeqaaOGaaiykaiqadggagaqcamaaBaaale aaceWGZbGbaKaacqGHRaWkcaWGPbaabeaakiaacIcacaaIXaGaeyOe I0IabmyyayaajaWaaSbaaSqaaiqadohagaqcaiabgUcaRiaaigdaae qaaOGaeyOeI0Iaeu4OdmLabmyyayaajaWaaSbaaSqaaiqadohagaqc aiabgUcaRiaadQgaaeqaaOGaaiykaiaadwgaceWG3bGbaKaacqGHRa WkcaGGOaGaamyyamaaBaaaleaacaWGZbGaey4kaSIaaGymaaqabaGc cqGHRaWkcuqHJoWugaqcaiaadggadaWgaaWcbaGaam4CaiabgUcaRi aadQgaaeqaaOGaaiykaiaadggadaWgaaWcbaGaamyAaaqabaGccaGG OaGaamyyamaaBaaaleaacaWGZbGaey4kaSIaaGymaaqabaGccqGHRa WkcuqHJoWugaqcaiaadggadaWgaaWcbaGaam4CaiabgUcaRiaadQga aeqaaOGaaiykaiaadEhaaeaacaWGPbGaeyypa0JaaGOmaiaacYcacq WIMaYscaGGSaGaam4CaaqaaiaaicdacqGH9aqpcaGGOaGaaGymaiab gkHiTiqadggagaqcamaaBaaaleaaceWGZbGbaKaacqGHRaWkcaaIXa aabeaakiabgkHiTiabfo6atjqadggagaqcamaaBaaaleaaceWGZbGb aKaacqGHRaWkcaWGQbaabeaakiaacMcaceWGHbGbaKaadaWgaaWcba Gabm4CayaajaGaey4kaSIaamyAaaqabaGcceWGHbGbaKaadaWgaaWc baGaam4AaaqabaGccaWGLbGabm4DayaajaGaey4kaSIaaiikaiaadg gadaWgaaWcbaGaam4CaiabgUcaRiaaigdaaeqaaOGaey4kaSIafu4O dmLbaKaacaWGHbWaaSbaaSqaaiaadohacqGHRaWkcaWGQbaabeaaki aacMcacaWGHbWaaSbaaSqaaiaadMgaaeqaaOGaamyyamaaBaaaleaa caWGZbGaey4kaSIaam4AaaqabaGccaWG3baabaqbaeqabeWaaaqaai aadMgacqGH9aqpcaaIYaGaaiilaiablAciljaacYcacaWGZbaabaGa aeyyaiaab6gacaqGKbaabaGaam4Aaiabg2da9iaaikdacaGGSaGaeS OjGSKaaiilaiqadohagaqcaaaaaaaa@ECBE@