RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency Equation (17b)

\begin{array}{l} {\hat{μ}}_{1} \equiv \hat{r} & \hat{σ} d \hat{z} \equiv {\hat{σ}}_{1} d {\hat{z}}_{1} \\ {\hat{μ}}_{2} \equiv (r - {\hat{μ}}_{e} + σ_{e}^{2} - σ_{1 e}) & {\hat{σ}}_{2} d {\hat{z}}_{2} \equiv - σ_{2} d z_{e} + σ_{1} d z_{1} \end{array}