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RDP 9812: An Optimising Model for Monetary Policy Analysis: Can Habit Formation Help?
Equation (8)
c
t
−
y
t
=
(
1
−
λ
)
∑
j
=
1
∞
ρ
j
E
t
[
Δ
y
t
+
j
+
a
1
(
p
t
+
j
+
1
−
p
t
+
j
)
+
a
2
(
z
t
+
j
+
1
−
z
t
+
j
)
−
δ
r
t
+
j
+
1
]
+
ε
c
t
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