RDP 2001-04: Measuring the Real Exchange Rate: Pitfalls and Practicalities
Equation (8)
Δ
p
m
t
=
ϕ
1
+
ϕ
2
p
m
t
−
1
+
ϕ
3
p
t
−
1
∗
x
+
ϕ
4
e
t
−
1
+
∑
i
=
0
1
ϕ
5
i
Δ
p
t
∗
x
+
∑
i
=
0
1
ϕ
6
i
Δ
e
t
−
i
+
ϕ
7
D
t
1
+
ϕ
8
t
+
ν
t
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