RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency
Equation (4′)
0
=
max
{
v
(
c
)
−
δ
J
+
{
w
[
μ
1
+
Σ
j
a
j
(
μ
j
−
μ
1
)
]
−
c
J
′
+
1
2
w
2
[
σ
1
2
+
2
Σ
j
a
j
(
σ
j
1
−
σ
1
2
)
+
Σ
j
Σ
i
a
j
a
i
(
σ
j
i
−
σ
j
1
−
σ
1
i
+
σ
1
2
)
]
J
″
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