RDP 2011-02: Long-term Interest Rates, Risk Premia and Unconventional Monetary Policy
Equation (2)
M
t
−
1
u
+
B
t
−
1
u
+
B
L
,
t
−
L
u
+
W
t
N
t
u
+
T
t
u
+
D
t
u
P
t
=
C
t
u
+
B
t
u
R
1
,
t
+
(
1
+
ζ
t
)
B
L
,
t
u
(
R
L
,
t
)
L
+
M
t
u
P
t
.
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