(30 points) [Hint: In your answer, you may want to include the following equations: Δqt+1=qt+1-qt=-ψδ(qt-q) and Δst+1=st
Posted: Thu Apr 28, 2022 11:40 am
(30 points)
[Hint: In your answer, you may want to
include the following equations:
Δqt+1=qt+1-qt=-ψδ(qt-q) and
Δst+1=st+1-st=
1ηst-1-ϕδqt+ mt+ϕδq, where
all the notations are as defined in the lectures. That is,
q is real exchange
rate in log; q is equilibrium
real exchange rate consistent with y;
s is nominal
exchange rate in log; m is money in log;
all Greek letters are positive parameters used in the model.]
please do it step by step
[Hint: In your answer, you may want to
include the following equations:
Δqt+1=qt+1-qt=-ψδ(qt-q) and
Δst+1=st+1-st=
1ηst-1-ϕδqt+ mt+ϕδq, where
all the notations are as defined in the lectures. That is,
q is real exchange
rate in log; q is equilibrium
real exchange rate consistent with y;
s is nominal
exchange rate in log; m is money in log;
all Greek letters are positive parameters used in the model.]
please do it step by step