RDP 2013-10: Stochastic Terms of Trade Volatility in Small Open Economies Equation

1 = β E t [ ( C t + 1 C t ) σ ( 1 + r + ψ ( d t + 1 d ) ) P t P t + 1 ] MathType@MTEF@5@5@+=feaagCart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLnhiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaGaaGymaGGaaiab=1da9iabek7aInrr1ngBPrwtHrhAYaqeguuDJXwAKbstHrhAGq1DVbacfaaeaaaaaaaaa8qacqGFecFrpaWaaSbaaSqaaiaadshaaeqaaOWaamWaaeaadaqadaqaamaalaaabaGaam4qamaaBaaaleaacaWG0bGaey4kaSIaaGymaaqabaaakeaacaWGdbWaaSbaaSqaaiaadshaaeqaaaaaaOGaayjkaiaawMcaamaaCaaaleqabaGaeyOeI0Iaeq4WdmhaaOWaaSaaaeaadaqadaqaaiaaigdacqGHRaWkcaWGYbGaey4kaSIaeqiYdK3aaeWaaeaacaWGKbWaaSbaaSqaaiaadshacqGHRaWkcaaIXaaabeaakiabgkHiTiaadsgaaiaawIcacaGLPaaaaiaawIcacaGLPaaacaWGqbWaaSbaaSqaaiaadshaaeqaaaGcbaGaamiuamaaBaaaleaacaWG0bGaey4kaSIaaGymaaqabaaaaaGccaGLBbGaayzxaaaaaa@662A@