Obviously, the overall price indexe

Obviously, the overall price indexes do not respond to an exchange rate movement if there is
either full pricing to market (s = 1) or a very strong home bias (! ! 1). Taking linearized
differences of the money market equations (29) and (30), substituting for the price levels and
keeping in mind that money supplies do not vary, we get the following expression for the
exchange rate:

Hasil (Bahasa Indonesia) 1:

Jelas, indeks harga keseluruhan tidak menanggapi pergerakan nilai tukar jika adabaik harga penuh untuk pasar (s = 1) atau bias rumah yang sangat kuat (!! 1). Mengambil linearizedperbedaan dan persamaan pasar uang (29) (30), menggantikan tingkat harga danmengingat bahwa persediaan uang tidak berubah, kita mendapatkan ekspresi berikut untukKurs: