RDP 2013-11: Issues in Estimating New-Keynesian Phillips Curves in the Presence of Unknown Structural Change Equation

π t + 1 = b 1 π t + b 2 x t + b 3 ( λ 1 r t 1 + λ 2 x t + λ 3 π t + ε 3 t ) + ξ t + 1 = d 1 π t + d 2 x t + d 3 r t 1 + ζ t + 1 MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaabbeaacqaHap aCdaWgaaWcbaGaamiDaiabgUcaRiaaigdaaeqaaOGaeyypa0JaamOy amaaBaaaleaacaaIXaaabeaakiabec8aWnaaBaaaleaacaWG0baabe aakiabgUcaRiaadkgadaWgaaWcbaGaaGOmaaqabaGccaWG4bWaaSba aSqaaiaadshaaeqaaOGaey4kaSIaamOyamaaBaaaleaacaaIZaaabe aakmaabmaabaGaeq4UdW2aaSbaaSqaaiaaigdaaeqaaOGaamOCamaa BaaaleaacaWG0bGaeyOeI0IaaGymaaqabaGccqGHRaWkcqaH7oaBda WgaaWcbaGaaGOmaaqabaGccaWG4bWaaSbaaSqaaiaadshaaeqaaOGa ey4kaSIaeq4UdW2aaSbaaSqaaiaaiodaaeqaaOGaeqiWda3aaSbaaS qaaiaadshaaeqaaOGaey4kaSIaeqyTdu2aaSbaaSqaaiaaiodacaWG 0baabeaaaOGaayjkaiaawMcaaiabgUcaRiabe67a4naaBaaaleaaca WG0bGaey4kaSIaaGymaaqabaaakeaacqGH9aqpcaWGKbWaaSbaaSqa aiaaigdaaeqaaOGaeqiWda3aaSbaaSqaaiaadshaaeqaaOGaey4kaS IaamizamaaBaaaleaacaaIYaaabeaakiaadIhadaWgaaWcbaGaamiD aaqabaGccqGHRaWkcaWGKbWaaSbaaSqaaiaaiodaaeqaaOGaamOCam aaBaaaleaacaWG0bGaeyOeI0IaaGymaaqabaGccqGHRaWkcqaH2oGE daWgaaWcbaGaamiDaiabgUcaRiaaigdaaeqaaaaaaa@7CA3@