RDP 9103: The Failure of Uncovered Interest Parity: Is it Near-Rationality in the Foreign Exchange Market? Equation (1)

W t+1 = W t + W t x t ' r t+1 + W t ( 1 x t ' 1 ) r t+1 us . MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaGaae4vamaaBa aaleaacaqG0bGaey4kaSIaaGymaaqabaGccqGH9aqpcaqGxbWaaSba aSqaaiaabshaaeqaaOGaey4kaSIaae4vamaaBaaaleaacaqG0baabe aakiaadIhadaqhaaWcbaGaaeiDaaqaaiaacEcaaaGccaWGYbWaaSba aSqaaiaabshacaqGRaGaaeymaaqabaGccqGHRaWkcaqGxbWaaSbaaS qaaiaabshaaeqaaOWaaeWaaeaacaaIXaaccaGae8NeI0IaamiEamaa DaaaleaacaqG0baabaGaai4jaaaakiaaigdaaiaawIcacaGLPaaaca WGYbWaa0baaSqaaiaabshacqGHRaWkcaaIXaaabaGaaeyDaiaaboha aaGccaGGUaaaaa@55FC@