The restriction imposed by the authors upon function Z consists of an expectations-augmented
Phillips Curve, including the exchange rate regime. Here, we have the first difference to the model
of BLEANEY and FIELDING (2002) since we will focus not on the real but on the nominal
exchange rate. Our restriction will be a Phillips Curve for an open economy similar to that one in
BOGDANSKI, TOMBINI and WERLANG (2000). Hence, our restriction is given by