RDP 2007-10: Trade Costs and Some Puzzles in International Macroeconomics
Equation (1)
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i
t
Y
i
t
=
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1
i
+
ϕ
1
S
i
t
Y
i
t
+
γ
1
S
i
t
Y
i
t
f
i
t
+
θ
1
f
i
t
+
e
1
i
t
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