RDP 9411: Demand Shocks, Inflation and the Business Cycle
Equation (8)
Δ
C
t
=
α
+
∑
i
=
1
2
δ
t
−
i
Δ
C
t
−
i
+
β
1
Δ
D
t
+
β
2
C
A
P
A
C
I
T
Y
t
−
1
+
β
3
π
t
+
μ
t
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