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RDP 2011-01: Estimating Inflation Expectations with a Limited Number of Inflation-indexed Bonds
Equation (B4)
α
τ
=
τ
ρ
0
+
ρ
′
(
τ
I
−
M
′
1
,
τ
)
μ
−
1
2
ρ
′
K
−
1
(
τ
Σ
Σ
′
−
Σ
Σ
′
M
1
,
τ
−
M
′
1
,
τ
Σ
Σ
′
+
M
2
,
τ
)
K
−
1
′
ρ
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