RDP 8610: Equilibrium Exchange Rates and a Popular Model of International Asset Demands: An Inconsistency Equation (21a)

\begin{array}{l} μ_{1} \equiv r & σ_{1} d z_{1} \equiv 0 \\ μ_{s + 1} \equiv (\hat{r} + μ_{e}) & σ_{s + 1} d z_{s + 1} \equiv σ_{e} d z_{e} \\ μ_{s + j} \equiv ({\hat{μ}}_{j} + μ_{e} + {\hat{σ}}_{j e}) & σ_{s + j} d z_{s + j} \equiv {\hat{σ}}_{j} d {\hat{z}}_{j} + σ_{e} d z_{e} & j = 2, \dots, \hat{s} \end{array}