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

π 0 ( 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 )w π i (1 a ^ s ^ +1 Σ a ^ s ^ +j ) a ^ s ^ +i e w ^ ( a s+1 + Σ ^ a s+j ) a i w i=2,,s π ^ i ( a ^ s ^ +1 +Σ a ^ s ^ +j ) a ^ i e w ^ +(1 a s+1 Σ ^ a s+j ) a s+i w i=2,, s ^ MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaqbaeaabmGaaa qaaiabec8aWnaaBaaaleaacaaIWaaabeaakiabggMi6kaacIcaceGG HbGbaKaadaWgaaWcbaGabm4CayaajaGaey4kaSIaaGymaaqabaGccq GHRaWkcqqHJoWuceWGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey4k aSIaamOAaaqabaGccaGGPaGaaiikaiaaigdacqGHsislceGGHbGbaK aadaWgaaWcbaGabm4CayaajaGaey4kaSIaaGymaaqabaGccqGHsisl cqqHJoWuceWGHbGbaKaadaWgaaWcbaGabm4CayaajaGaey4kaSIaam OAaaqabaGccaGGPaGaaiyzaiqacEhagaqcaiabgUcaRiaacIcacaaI XaGaeyOeI0IaaiyyamaaBaaaleaacaWGZbGaey4kaSIaaGymaaqaba GccqGHsislcuqHJoWugaqcaiaadggadaWgaaWcbaGaam4CaiabgUca RiaadQgaaeqaaOGaaiykaiaacIcacaGGHbWaaSbaaSqaaiaadohacq GHRaWkcaaIXaaabeaakiabgUcaRiqbfo6atzaajaGaamyyamaaBaaa leaacaWGZbGaey4kaSIaamOAaaqabaGccaGGPaGaai4Daaqaaaqaai abec8aWnaaBaaaleaacaWGPbaabeaakiabggMi6kabgkHiTiaacIca caaIXaGaeyOeI0IabiyyayaajaWaaSbaaSqaaiqadohagaqcaiabgU caRiaaigdaaeqaaOGaeyOeI0Iaeu4OdmLabmyyayaajaWaaSbaaSqa aiqadohagaqcaiabgUcaRiaadQgaaeqaaOGaaiykaiqacggagaqcam aaBaaaleaaceWGZbGbaKaacqGHRaWkcaWGPbaabeaakiaadwgaceWG 3bGbaKaacqGHsislcaGGOaGaaiyyamaaBaaaleaacaWGZbGaey4kaS IaaGymaaqabaGccqGHRaWkcuqHJoWugaqcaiaadggadaWgaaWcbaGa am4CaiabgUcaRiaadQgaaeqaaOGaaiykaiaacggadaWgaaWcbaGaam yAaaqabaGccaWG3baabaGaamyAaiabg2da9iaaikdacaGGSaGaeSOj GSKaaiilaiaadohaaeaacuaHapaCgaqcamaaBaaaleaacaWGPbaabe aakiabggMi6kaacIcaceGGHbGbaKaadaWgaaWcbaGabm4CayaajaGa ey4kaSIaaGymaaqabaGccqGHRaWkcqqHJoWuceWGHbGbaKaadaWgaa WcbaGabm4CayaajaGaey4kaSIaamOAaaqabaGccaGGPaGabiyyayaa jaWaaSbaaSqaaiaadMgaaeqaaOGaamyzaiqadEhagaqcaiabgUcaRi aacIcacaaIXaGaeyOeI0IaaiyyamaaBaaaleaacaWGZbGaey4kaSIa aGymaaqabaGccqGHsislcuqHJoWugaqcaiaadggadaWgaaWcbaGaam 4CaiabgUcaRiaadQgaaeqaaOGaaiykaiaacggadaWgaaWcbaGaam4C aiabgUcaRiaadMgaaeqaaOGaam4DaaqaaiaadMgacqGH9aqpcaaIYa GaaiilaiablAciljaacYcaceWGZbGbaKaaaaaaaa@CB6B@