RDP 2008-03: Monetary Transmission and the Yield Curve in a Small Open Economy Equation (8)

x t = E t x t + 1 − σ α − 1 ( R 1 , t − E t π h , t + 1 ) + ϕ 3 E t Δ y t + 1 * + σ − 1 ( 1 − ρ g ) ( 1 − ϕ 2 ) g t + σ − 1 ( 1 − ρ g * ) ϕ 3 g t * − ϕ 4 ( 1 − ρ a ) a t MathType@MTEF@5@5@+= feaagKart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr 4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9 vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=x fr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaacaWG4b WaaSbaaSqaaiaadshaaeqaaOGaeyypa0JaamyramaaBaaaleaacaWG 0baabeaakiaadIhadaWgaaWcbaGaamiDaiabgUcaRiaaigdaaeqaaO GaeyOeI0Iaeq4Wdm3aa0baaSqaaiabeg7aHbqaaiabgkHiTiaaigda aaGcdaqadaqaaiaadkfadaWgaaWcbaGaaGymaiaacYcacaWG0baabe aakiabgkHiTiaadweadaWgaaWcbaGaamiDaaqabaGccqaHapaCdaWg aaWcbaGaamiAaiaacYcacaWG0bGaey4kaSIaaGymaaqabaaakiaawI cacaGLPaaacqGHRaWkcqaHvpGzdaWgaaWcbaGaaG4maaqabaGccaWG fbWaaSbaaSqaaiaadshaaeqaaOGaeuiLdqKaamyEamaaDaaaleaaca WG0bGaey4kaSIaaGymaaqaaiaacQcaaaGccqGHRaWkaeaacqaHdpWC daahaaWcbeqaaiabgkHiTiaaigdaaaGcdaqadaqaaiaaigdacqGHsi slcqaHbpGCdaWgaaWcbaGaam4zaaqabaaakiaawIcacaGLPaaadaqa daqaaiaaigdacqGHsislcqaHvpGzdaWgaaWcbaGaaGOmaaqabaaaki aawIcacaGLPaaacaWGNbWaaSbaaSqaaiaadshaaeqaaOGaey4kaSIa eq4Wdm3aaWbaaSqabeaacqGHsislcaaIXaaaaOWaaeWaaeaacaaIXa GaeyOeI0IaeqyWdi3aa0baaSqaaiaadEgaaeaacaGGQaaaaaGccaGL OaGaayzkaaGaeqy1dy2aaSbaaSqaaiaaiodaaeqaaOGaam4zamaaDa aaleaacaWG0baabaGaaiOkaaaakiabgkHiTiabew9aMnaaBaaaleaa caaI0aaabeaakmaabmaabaGaaGymaiabgkHiTiabeg8aYnaaBaaale aacaWGHbaabeaaaOGaayjkaiaawMcaaiaadggadaWgaaWcbaGaamiD aaqabaaaaaa@8DC3@