RDP 8905: Monetary Policy Instruments: A Theoretical Analysis Equation

\begin{matrix} π_{1} = \frac{α^{2} σ_{v}^{2}}{σ_{u}^{2}} - δ & ρ_{2} = \frac{σ_{u}^{2}}{σ^{2} σ_{w}^{2} - {δσ}_{u}^{2} {/σ}_{v}^{2}} \\ π_{2} = \frac{{-σ}_{v}^{2}}{σ_{w}^{2}} \end{matrix}