RDP 9504: The Link Between the Cash Rate and Market Interest Rates
Equation (6)
r
l
−
r
c
a
s
h
=
1
p
[
α
(
r
c
−
r
d
)
+
c
+
(
1
−
q
)
−
(
1
−
β
)
(
r
c
a
s
h
−
r
l
o
w
)
+
(
1
−
p
)
r
c
a
s
h
]
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