RDP 2006-02: Term Structure Rules for Monetary Policy Equation (14)

R_{1, t} = (1 + \frac{λ}{β}) R_{1, t - 1} + \frac{1}{β} Δ R_{1, t - 1} + \frac{λ}{ω_{R}} π_{t} + \frac{ω_{x}}{ω_{R}} Δ x_{t}