Exchange rate dynamics, asset market structure and the role of the ...

Optimal capital accumulation equations
^ t = ^A t ^k t 1 + ^l t (A12)
^q t
(1 + )s 00 () + 1
(1 + ) ^x
t 1 +
(1 + ) ^x t+1 (v ') ^T 1
t
(1 + )s 00 () = ^x t (A13)
^q t
(1 + )s 00 () + 1
(1 + ) ^x t 1 +
(1 + ) ^x t+1 (v ' ) ^T 1
t
(1 + )s 00 () = ^x t (A14)
Home and Foreign MPL equations
(v 1) ^T t + ^A t + ( 1)^l t + (1 )^k t 1 = ^w t (A15)
v ^T t
c RSt + ^A t + ( 1)^l t + (1 )^k t 1 = ^w t (A16)
Home and Foreign capital accumulation constraints
^k t = ^k t 1 (1 ) + ^x t (A17)
Home and Foreign production functions
^k t = ^k t 1(1 ) + ^x t (A18)
^y H;t = ^A t + (1 )^k t 1 + ^l t (A19)
Home and Foreign economy-wide constraints
^y F ;t = ^A t + (1 )^k t 1 + ^l t (A20)
^y H;t = c H
y H
^c H + c H
y H
^c H + x H
y H
^x H + x H
y H
^x H
(A21)
Real exchange rate
^y F ;t = c F
^c F + c F
^c F + x F
^x F + x F
^x F
y F y F y F y F
(A22)
cRS t = (v v ) ^T t (A24)
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