RBA Annual Conference – 2018
Equation (7)
i
t
=
1
σ
[
E
t
x
t
+
1
−
λ
x
λ
x
+
κ
2
x
t
−
1
+
(
β
κ
λ
x
+
κ
2
+
σ
)
E
t
π
t
+
1
+
κ
λ
x
+
κ
2
u
t
+
r
t
n
]