RDP 8708: Risk Effects Versus Monetary Effects in the Determination of Short-Term Interest Rates
Equation (3)
log
b
t
*
(
k
)
=
−
γ
E
t
(
log
x
t+k
−
log
x
t
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−
BE
t
(
log
p
t+k
−
log
p
t
)
+
k
log
β
+
θ
t
(
k
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