OPEN ECONOMY II: THE CURRENT ACCOUNT IN AN INTERTEMPORAL FRAMEWORK
367
Similarly, the slope of Eq. (13.29) is greater than unity when
r
.
The steady-state solution is obtained by setting
f
t
+
1
=
f
t
=
_
f
in the above
equation. Hence,
_
f
=
tb
____________
(1
+
)(1
+
)
+
(1
+
r
+
)
____________
(1
+
)(1
+
)
_
f
or,
(1
+
)(1
+
)
-
(1
+
r
+
)
________________________
(1
+
)(1
+
)
_
f
=
tb
____________
(1
+
)(1
+
)
or,
1
+
+
+
-
1
-
r
-
_________________________
(1
+
)(1
+
)
_
f
=
tb
____________
(1
+ ...
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