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RDP 2010-03: Modelling Inflation in Australia
Equation (A1)
adjustment
costs=
ϕ
2
[
P
t
(
i
)
Π
t
−
1
α
(
Π
t
*
)
1
−
α
P
t
−
1
(
i
)
−
1
]
2
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