RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency
Equation
0
=
(
a
^
s
^
+
1
+
Σ
a
^
s
^
+
j
)
(
1
−
a
^
s
^
+
1
−
Σ
a
^
s
^
+
j
)
a
^
s
^
+
k
e
w
^
+
(
1
−
a
s
+
1
−
Σ
^
a
s
+
j
)
(
a
s
+
1
+
Σ
^
a
s
+
j
)
a
k
w
k
=
2
,
…
,
s
0
=
(
a
^
s
^
+
1
+
Σ
a
^
s
^
+
j
)
(
1
−
a
^
s
^
+
1
−
Σ
a
^
s
^
+
j
)
(
1
−
a
^
s
^
+
1
−
Σ
a
^
s
^
+
j
)
e
w
^
+
(
1
−
a
s
+
1
−
Σ
^
a
s
+
j
)
(
a
s
+
1
+
Σ
^
a
s
+
j
)
(
a
s
+
1
+
Σ
^
a
s
+
j
)
w
0
=
(
a
^
s
^
+
1
+
Σ
a
^
s
^
+
j
)
(
1
−
a
^
s
^
+
1
−
Σ
a
^
s
^
+
j
)
a
^
k
e
w
^
+
(
1
−
a
s
+
1
−
Σ
^
a
s
+
j
)
(
a
s
+
1
+
Σ
^
a
s
+
j
)
a
s
+
k
w
k
=
2
,
…
,
s
^
MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaacaaIWa Gaeyypa0JaaiikaiqadggagaqcamaaBaaaleaaceWGZbGbaKaacqGH RaWkcaaIXaaabeaakiabgUcaRiabfo6atjqadggagaqcamaaBaaale aaceWGZbGbaKaacqGHRaWkcaWGQbaabeaakiaacMcacaGGOaGaaGym aiabgkHiTiqadggagaqcamaaBaaaleaaceWGZbGbaKaacqGHRaWkca aIXaaabeaakiabgkHiTiabfo6atjqadggagaqcamaaBaaaleaaceWG ZbGbaKaacqGHRaWkcaWGQbaabeaakiaacMcaceWGHbGbaKaadaWgaa WcbaGabm4CayaajaGaey4kaSIaam4AaaqabaGccaWGLbGabm4Dayaa jaGaey4kaSIaaiikaiaaigdacqGHsislcaWGHbWaaSbaaSqaaiaado hacqGHRaWkcaaIXaaabeaakiabgkHiTiqbfo6atzaajaGaamyyamaa BaaaleaacaWGZbGaey4kaSIaamOAaaqabaGccaGGPaGaaiikaiaadg gadaWgaaWcbaGaam4CaiabgUcaRiaaigdaaeqaaOGaey4kaSIafu4O dmLbaKaacaWGHbWaaSbaaSqaaiaadohacqGHRaWkcaWGQbaabeaaki aacMcacaWGHbWaaSbaaSqaaiaadUgaaeqaaOGaam4DaaqaaiaadUga cqGH9aqpcaaIYaGaaiilaiablAciljaacYcacaWGZbaabaGaaGimai abg2da9iaacIcaceWGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey4k aSIaaGymaaqabaGccqGHRaWkcqqHJoWuceWGHbGbaKaadaWgaaWcba Gabm4CayaajaGaey4kaSIaamOAaaqabaGccaGGPaGaaiikaiaaigda cqGHsislceWGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey4kaSIaaG ymaaqabaGccqGHsislcqqHJoWuceWGHbGbaKaadaWgaaWcbaGabm4C ayaajaGaey4kaSIaamOAaaqabaGccaGGPaGaaiikaiaaigdacqGHsi slceWGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey4kaSIaaGymaaqa baGccqGHsislcqqHJoWuceWGHbGbaKaadaWgaaWcbaGabm4Cayaaja Gaey4kaSIaamOAaaqabaGccaGGPaGaamyzaiqadEhagaqcaaqaaiab gUcaRiaacIcacaaIXaGaeyOeI0IaamyyamaaBaaaleaacaWGZbGaey 4kaSIaaGymaaqabaGccqGHsislcuqHJoWugaqcaiaadggadaWgaaWc baGaam4CaiabgUcaRiaadQgaaeqaaOGaaiykaiaacIcacaWGHbWaaS baaSqaaiaadohacqGHRaWkcaaIXaaabeaakiabgUcaRiqbfo6atzaa jaGaamyyamaaBaaaleaacaWGZbGaey4kaSIaamOAaaqabaGccaGGPa GaaiikaiaadggadaWgaaWcbaGaam4CaiabgUcaRiaaigdaaeqaaOGa ey4kaSIafu4OdmLbaKaacaWGHbWaaSbaaSqaaiaadohacqGHRaWkca WGQbaabeaakiaacMcacaWG3baabaGaaGimaiabg2da9iaacIcaceWG HbGbaKaadaWgaaWcbaGabm4CayaajaGaey4kaSIaaGymaaqabaGccq GHRaWkcqqHJoWuceWGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey4k aSIaamOAaaqabaGccaGGPaGaaiikaiaaigdacqGHsislceWGHbGbaK aadaWgaaWcbaGabm4CayaajaGaey4kaSIaaGymaaqabaGccqGHsisl cqqHJoWuceWGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey4kaSIaam OAaaqabaGccaGGPaGabmyyayaajaWaaSbaaSqaaiaadUgaaeqaaOGa amyzaiqadEhagaqcaiabgUcaRiaacIcacaaIXaGaeyOeI0Iaamyyam aaBaaaleaacaWGZbGaey4kaSIaaGymaaqabaGccqGHsislcuqHJoWu gaqcaiaadggadaWgaaWcbaGaam4CaiabgUcaRiaadQgaaeqaaOGaai ykaiaacIcacaWGHbWaaSbaaSqaaiaadohacqGHRaWkcaaIXaaabeaa kiabgUcaRiqbfo6atzaajaGaamyyamaaBaaaleaacaWGZbGaey4kaS IaamOAaaqabaGccaGGPaGaamyyamaaBaaaleaacaWGZbGaey4kaSIa am4AaaqabaGccaWG3baabaGaam4Aaiabg2da9iaaikdacaGGSaGaeS OjGSKaaiilaiqadohagaqcaaaaaa@0BF4@