RDP 2013-10: Stochastic Terms of Trade Volatility in Small Open Economies Equation (8)

K t + 1 j = ( 1 δ ) K t j + ( 1 ϕ 2 ( I t j I t 1 j 1 ) 2 ) I t j MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaGaam4samaaDa aaleaacaWG0bGaey4kaSIaaGymaaqaaiaadQgaaaaccaGccqWF9aqp daqadaqaaiaaigdacqGHsislcqaH0oazaiaawIcacaGLPaaacaWGlb Waa0baaSqaaiaadshaaeaacaWGQbaaaOGaey4kaSYaaeWaaeaacaaI XaGaeyOeI0YaaSaaaeaacqaHvpGzaeaacaaIYaaaamaabmaabaWaaS aaaeaacaWGjbWaa0baaSqaaiaadshaaeaacaWGQbaaaaGcbaGaamys amaaDaaaleaacaWG0bGaeyOeI0IaaGymaaqaaiaadQgaaaaaaOGaey OeI0IaaGymaaGaayjkaiaawMcaamaaCaaaleqabaGaaGOmaaaaaOGa ayjkaiaawMcaaiaadMeadaqhaaWcbaGaamiDaaqaaiaadQgaaaaaaa@5890@