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RDP 9803: Forward-Looking Behaviour and Credibility: Some Evidence and Implications for Policy
Equation (6)
Δ
y
t
=
α
1
−
α
2
y
t
−
1
+
α
3
y
t
−
1
∗
+
α
4
t
o
t
t
−
1
−
α
5
r
t
w
i
t
−
1
+
α
6
Δ
f
y
t
−
1
+
α
7
Δ
f
y
t
−
2
+
α
8
Δ
y
t
*
−
α
9
r
t
−
2
−
α
10
r
t
−
3
−
α
11
r
t
−
4
−
α
12
r
t
−
5
−
α
13
r
t
−
6
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