RDP 2011-02: Long-term Interest Rates, Risk Premia and Unconventional Monetary Policy
Equation
U
(
⋅
)
=
1
1
−
σ
(
C
t
u
(
C
t
−
1
u
)
h
)
1
−
σ
,
V
(
⋅
)
=
1
1
−
δ
(
M
t
u
e
t
P
t
)
1
−
δ
,
G
(
⋅
)
=
d
2
{
exp
[
c
{
M
t
u
/
P
t
M
t
−
1
u
/
P
t
−
1
−
1
}
]
+
exp
[
−
c
{
M
t
u
/
P
t
M
t
−
1
u
/
P
t
−
1
−
1
}
]
−
2
}
,
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