Skip to content
RDP 8708: Risk Effects Versus Monetary Effects in the Determination of Short-Term Interest Rates
Equation (8)
log
b
t
(
1
)
−
log
b
t
*
(
1
)
=
−
1
δ
log
p
t
+
1
δ
log
m
t
+
π
t
=
−
1
δ
(
log
p
t
−log
p
t
*
)
=−
α
δ
(
log
p
t−1
−
log
p
t−1
*
)
+
1
δ
ε
t
+η
t
=
α
(
log
b
t−1
(
1
)
−
log
b
t−1
*
(
1
)
)
+
1
δ
ε
t
+
η
t
.
MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaqbaeaabqGaaa aabaGaaeiBaiaab+gacaqGNbGaaGPaVlaabkgadaWgaaWcbaGaaeiD aaqabaGcdaqadaqaaiaabgdaaiaawIcacaGLPaaacaaMc8Uaaeylai aaykW7caqGSbGaae4BaiaabEgacaaMc8UaaeOyamaaDaaaleaacaqG 0baabaGaaeOkaaaakmaabmaabaGaaeymaaGaayjkaiaawMcaaaqaai aab2dacaaMc8UaaeylamaalaaabaGaaeymaaqaaiaabs7aaaGaaeiB aiaab+gacaqGNbGaaGPaVlaabchadaWgaaWcbaGaaeiDaaqabaGcca aMc8Uaae4kaiaaykW7daWcaaqaaiaabgdaaeaacaqG0oaaaiaabYga caqGVbGaae4zaiaaykW7caqGTbWaaSbaaSqaaiaabshaaeqaaOGaaG PaVlaabUcacaaMc8UaaeiWdmaaBaaaleaacaqG0baabeaaaOqaaaqa aiaab2dacaaMc8UaaeylamaalaaabaGaaeySdaqaaiaabs7aaaWaae WaaeaacaqGSbGaae4BaiaabEgacaaMc8UaaeiCamaaBaaaleaacaqG 0baabeaakiaab2cacaqGSbGaae4BaiaabEgacaaMc8UaaeiCamaaDa aaleaacaqG0baabaGaaeOkaaaaaOGaayjkaiaawMcaaaqaaaqaaiaa b2dacaqGTaGaaGPaVpaalaaabaGaaeySdaqaaiaabs7aaaWaaeWaae aacaqGSbGaae4BaiaabEgacaaMc8UaaeiCamaaBaaaleaacaqG0bGa aeylaiaabgdaaeqaaOGaaGPaVlaab2cacaaMc8UaaeiBaiaab+gaca qGNbGaaGPaVlaabchadaqhaaWcbaGaaeiDaiaab2cacaqGXaaabaGa aeOkaaaaaOGaayjkaiaawMcaaiaaykW7caqGRaGaaGPaVpaalaaaba Gaaeymaaqaaiaabs7aaaGaaeyTdmaaBaaaleaacaqG0baabeaakiaa bUcacaqG3oWaaSbaaSqaaiaabshaaeqaaaGcbaaabaGaaeypaiaayk W7caqGXoWaaeWaaeaacaqGSbGaae4BaiaabEgacaaMc8UaaeOyamaa BaaaleaacaqG0bGaaeylaiaabgdaaeqaaOWaaeWaaeaacaqGXaaaca GLOaGaayzkaaGaaGPaVlaab2cacaaMc8UaaeiBaiaab+gacaqGNbGa aGPaVlaabkgadaqhaaWcbaGaaeiDaiaab2cacaqGXaaabaGaaeOkaa aakmaabmaabaGaaeymaaGaayjkaiaawMcaaaGaayjkaiaawMcaaiaa ykW7caqGRaGaaGPaVpaalaaabaGaaeymaaqaaiaabs7aaaGaaGPaVl aabw7adaWgaaWcbaGaaeiDaaqabaGccaaMc8Uaae4kaiaaykW7caqG 3oWaaSbaaSqaaiaabshaaeqaaOGaaeOlaaaaaaa@D387@