Appendix: Working Equation
The steady state probability of devaluation for each government type,
are incorporated in equation (6) to obtain the following,
which, assuming m0-1 leads to the final expressions:
The latter is the expression to be linearized in order to obtain equation (9), which is presented in its complete form below:
(linearizing around urt-2-0, mt-2-1 and πt-1-π0, and assuming Dt-2-D0)
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