RDP 8611: The Effectiveness of Fiscal Policy in an Economy with Anticipatory Wage Contracts Equation (16)

[\begin{matrix} \dot{π} \\ \dot{y} \end{matrix}] = [\begin{matrix} \frac{(1 - ξ + η ℓ_{y})}{ℓ_{i}} & \frac{ℓ_{y} (\hat{π} + n - ϕ)}{ℓ_{i}} \\ η & - ϕ \end{matrix}] [\begin{matrix} π - \hat{π} \\ y - \hat{y} \end{matrix}]