RDP 2009-06: Inflation Volatility And Forecast Accuracy Equation (4)

\log (σ_{η}^{2}_{, t}) = \log (σ_{η}^{2}_{, t - 1}) + ν_{η, t}

\begin{matrix} ν_{ε, t} \sim N (0, γ_{ε}) & ν_{η, t} \sim N (0, γ_{η}) \end{matrix}