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RDP 8708: Risk Effects Versus Monetary Effects in the Determination of Short-Term Interest Rates
Equation (6)
log
p
t
−
log
p
t−1
=
E
t−1
(
log
p
t
*
−
log
p
t−1
*
)
+
(
1−α
)
(
log
p
t−1
*
−
log
p
t−1
)
.
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