RDP 2007-10: Trade Costs and Some Puzzles in International Macroeconomics
Equation (4)
log
(
C
i
t
C
∗
t
)
=
δ
4
i
+
ϕ
4
log
(
G
D
P
i
t
G
D
P
∗
t
)
+
γ
4
log
(
G
D
P
i
t
G
D
P
∗
t
)
f
i
t
+
θ
4
f
i
t
+
e
4
i
t
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