RDP 2000-06: Inflation Targeting and Exchange Rate Fluctuations in Australia
Equation (7)
i
t
=
λ
i
t
−
1
+
(
1
−
λ
)
[
r
n
+
π
t
−
1
+
ψ
1
E
t
(
Π
t
+
f
−
Π
*
)
+
ψ
2
E
t
(
y
t
+
f
−
y
t
+
f
p
)
]
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