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RDP 9306: Inventories and the Business Cycle
Equation (6)
E
[
I
t
|
Ω
t
]
=
α
+
λ
I
t
−
1
−
λ
(
ξ
S
t
−
u
t
)
+
(
1
−
λ
ξ
)
∑
i
=
1
∞
[
λ
1
+
θ
]
i
E
[
S
t
+
i
|
Ω
t
]
−
(
1
−
λ
)
∑
i
=
1
∞
[
λ
1
+
θ
]
i
E
[
u
t
+
i
|
Ω
t
]
w
h
e
r
e
ξ
=
γ
−
β
δ
γ
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