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RDP 2008-10: Solving Linear Rational Expectations Models with Predictable Structural Changes
Equation (23)
r
t
=
(
1
−
ρ
r
)
r
+
ρ
r
r
t
−
1
+
ρ
π
(
π
t
−
π
*
)
+
ρ
y
y
^
t
+
ρ
g
g
^
t
+
ε
r
,
t
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