RDP 8708: Risk Effects Versus Monetary Effects in the Determination of Short-Term Interest Rates
Equation (4)
θ
t
(
k
)
=
γ
2
2
σ
t
2
(
x
t+k
)
+
1
2
σ
t
2
(
p
t+k
)
−
γ
σ
t
(
x
t+k
,
p
t+k
)
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