RDP 9812: An Optimising Model for Monetary Policy Analysis: Can Habit Formation Help? Equation (3)

1 C t ( C t Z t γ ) ( 1−σ ) −γ( 1−σ )( 1− ρ z ) P t = β E t [ ( 1+ r t+1 ) 1 C t+1 ( C t+1 Z t+1 γ ) ( 1−σ ) ]− β γ ( 1−σ )( 1− ρ z ) E t [ ( 1+ r t+1 ) P t+1 ] MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaGabeaadaWcaa qaaiaaigdaaeaacaWGdbWaaSbaaSqaaiaadshaaeqaaaaakmaabmaa baWaaSaaaeaacaWGdbWaaSbaaSqaaiaadshaaeqaaaGcbaGaamOwam aaDaaaleaacaWG0baabaGaeq4SdCgaaaaaaOGaayjkaiaawMcaamaa CaaaleqabaWaaeWaaeaacaaIXaGaeyOeI0Iaeq4WdmhacaGLOaGaay zkaaaaaOGaeyOeI0Iaeq4SdC2aaeWaaeaacaaIXaGaeyOeI0Iaeq4W dmhacaGLOaGaayzkaaWaaeWaaeaacaaIXaGaeyOeI0IaeqyWdi3aaS baaSqaaiaadQhaaeqaaaGccaGLOaGaayzkaaGaamiuamaaBaaaleaa caWG0baabeaakiabg2da9aqaaiabek7aIjaadweadaWgaaWcbaGaam iDaaqabaGcdaWadaqaamaabmaabaGaaGymaiabgUcaRiaadkhadaWg aaWcbaGaamiDaiabgUcaRiaaigdaaeqaaaGccaGLOaGaayzkaaWaaS aaaeaacaaIXaaabaGaam4qamaaBaaaleaacaWG0bGaey4kaSIaaGym aaqabaaaaOWaaeWaaeaadaWcaaqaaiaadoeadaWgaaWcbaGaamiDai abgUcaRiaaigdaaeqaaaGcbaGaamOwamaaDaaaleaacaWG0bGaey4k aSIaaGymaaqaaiabeo7aNbaaaaaakiaawIcacaGLPaaadaahaaWcbe qaamaabmaabaGaaGymaiabgkHiTiabeo8aZbGaayjkaiaawMcaaaaa aOGaay5waiaaw2faaiabgkHiTiabek7aInaaBaaaleaacqaHZoWzae qaaOWaaeWaaeaacaaIXaGaeyOeI0Iaeq4WdmhacaGLOaGaayzkaaWa aeWaaeaacaaIXaGaeyOeI0IaeqyWdi3aaSbaaSqaaiaadQhaaeqaaa GccaGLOaGaayzkaaGaamyramaaBaaaleaacaWG0baabeaakmaadmaa baWaaeWaaeaacaaIXaGaey4kaSIaamOCamaaBaaaleaacaWG0bGaey 4kaSIaaGymaaqabaaakiaawIcacaGLPaaacaWGqbWaaSbaaSqaaiaa dshacqGHRaWkcaaIXaaabeaaaOGaay5waiaaw2faaaaaaa@9462@