Skip to content
RDP 9101: The Effect of Steady Inflation on Interest Rates and the Real Exchange Rate in a World with Free Capital Flows
Equation (A7)
<
r
>
=
l
T
∫
0
T
{
r
I
t+r
II
(
T
−
t
)
}
ε
e
−
ε
t
dt+r
I
e
−
ε
T
=
r
II
+
(
r
I
−
r
II
)
l
−
e
−
ε
T
ε
T
≈
r
I
+
(
r
II
−
r
I
)
ε
T
2
when
εT
is
small
.
MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaacqGH8a apcaqGYbGaeyOpa4Jaeyypa0ZaaSaaaeaacaaIXaaabaGaaeivaaaa daWdXbqaamaacmaabaGaaeOCamaaCaaaleqabaGaaeysaaaakiaabs hacaqGRaGaaeOCamaaCaaaleqabaGaaeysaiaabMeaaaGcdaqadaqa aiaabsfaiiaacqWFsislcaqG0baacaGLOaGaayzkaaaacaGL7bGaay zFaaaaleaacaaIWaaabaGaaeivaaqdcqGHRiI8aOGaeqyTduMaaeyz amaaCaaaleqabaGae8NeI0IaeqyTduMaamiDaaaakiaabsgacaqG0b Gaae4kaiaabkhadaahaaWcbeqaaiaabMeaaaGccaqGLbWaaWbaaSqa beaacqWFsislcqaH1oqzcaqGubaaaaGcbaGaeyypa0JaaeOCamaaCa aaleqabaGaaeysaiaabMeaaaGccqGHRaWkdaqadaqaaiaabkhadaah aaWcbeqaaiaabMeaaaGccqWFsislcaqGYbWaaWbaaSqabeaacaqGjb GaaeysaaaaaOGaayjkaiaawMcaamaalaaabaGaaGymaiab=jHiTiaa bwgacqWFsislcqaH1oqzcaqGubaabaGaeqyTduMaaeivaaaaaeaacq GHijYUcaqGYbWaaWbaaSqabeaacaqGjbaaaOGaey4kaSYaaeWaaeaa caqGYbWaaWbaaSqabeaacaqGjbGaaeysaaaakiab=jHiTiaabkhada ahaaWcbeqaaiaabMeaaaaakiaawIcacaGLPaaadaWcaaqaaiabew7a LjaabsfaaeaacaaIYaaaaiaaykW7caaMc8Uaae4DaiaabIgacaqGLb GaaeOBaiaaykW7caqG1oGaaeivaiaaykW7caqGPbGaae4CaiaaykW7 caqGZbGaaeyBaiaabggacaqGSbGaaeiBaiaab6caaaaa@93EB@