RDP 2006-05: Optimal Monetary Policy with Real-time Signal Extraction from the Bond Market
Equation (44)
E
t
m
˜
t
+
1
=
−
γ
E
t
c
t
+
1
+
(
γ
−
η
+
γ
η
)
c
t
+
η
(
1
−
γ
)
c
t
−
1
−
E
t
π
t
+
1
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