RDP 9101: The Effect of Steady Inflation on Interest Rates and the Real Exchange Rate in a World with Free Capital Flows
Equation (16)
∫
0
T
e
−
εt
ε
[
∫
0
t
(
r
T
+
π
)
e
−
(
r
*
+
π
)
τ
dτ+(1
−
Δ
c)
{
∫
t
T
(
r
T
+
π
)
e
−
(
r
*
+
π
)
τ
dτ+e
−
(
r
*
+
π
)
T
}
]
dt
+e
−
εT
{
∫
0
T
(
r
T
+
π
)
e
−
(
r
*
+
π
)
τ
dτ+e
−
(
r
*
+
π
)
T
}
=
1.
MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaadaWdXb qaaiaabwgadaahaaWcbeqaaiabgkHiTiaabw7acaqG0baaaOGaaeyT daWcbaGaaGimaaqaaiaabsfaa0Gaey4kIipakmaadmaabaWaa8qCae aacaGGOaGaaiOCamaaBaaaleaacaqGubaabeaakiabgUcaRiaabc8a caGGPaaaleaacaaIWaaabaGaaeiDaaqdcqGHRiI8aOGaaeyzamaaCa aaleqabaGaeyOeI0IaaiikaiaackhadaahaaadbeqaaiaacQcaaaWc cqGHRaWkcaqGapGaaiykaiaabs8aaaGccaqGKbGaaeiXdiaabUcaca qGOaGaaeymaGGaaiab=jHiTiabfs5aejaabogacaqGPaWaaiWaaeaa daWdXbqaaiaacIcacaGGYbWaaSbaaSqaaiaabsfaaeqaaOGaey4kaS IaaeiWdiaacMcacaGGLbWaaWbaaSqabeaacqGHsislcaGGOaGaaiOC amaaCaaameqabaGaaiOkaaaaliabgUcaRiaabc8acaGGPaGaaeiXda aakiaabsgacaqGepGaae4kaiaabwgadaahaaWcbeqaaiabgkHiTiaa cIcacaGGYbWaaWbaaWqabeaacaGGQaaaaSGaey4kaSIaaeiWdiaacM cacaGGubaaaaqaaiaabshaaeaacaqGubaaniabgUIiYdaakiaawUha caGL9baaaiaawUfacaGLDbaacaqGKbGaaeiDaaqaaiaabUcacaqGLb WaaWbaaSqabeaacqGHsislcaqG1oGaaeivaaaakmaacmaabaWaa8qC aeaacaGGOaGaaiOCamaaBaaaleaacaqGubaabeaakiabgUcaRiaabc 8acaGGPaGaaiyzamaaCaaaleqabaGaeyOeI0Iaaiikaiaackhadaah aaadbeqaaiaacQcaaaWccqGHRaWkcaqGapGaaiykaiaabs8aaaGcca qGKbGaaeiXdiaabUcacaqGLbWaaWbaaSqabeaacqGHsislcaGGOaGa aiOCamaaCaaameqabaGaaiOkaaaaliabgUcaRiaabc8acaGGPaGaai ivaaaaaeaacaaIWaaabaGaaeivaaqdcqGHRiI8aaGccaGL7bGaayzF aaGaeyypa0JaaGymaiaac6caaaaa@A43C@