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RDP 2011-01: Estimating Inflation Expectations with a Limited Number of Inflation-indexed Bonds
Equation (7)
H
2
(
x
t
)
=
exp
(
−
α
¯
τ
−
β
¯
′
τ
(
e
−
K
(
s
−
t
)
x
t
+
(
I
−
e
−
K
(
s
−
t
)
)
μ
)
+
1
2
β
¯
′
τ
Ω
s
−
t
β
¯
τ
)
.
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