RDP 2012-01: Co-movement in Inflation Equation (1B)

Z_{t, country} = (Σ_{p = 1}^{2} Σ_{i = 1}^{3} Δ y_{i, t - p}^{n}) θ_{n}^{r e a l} + (Σ_{p = 1}^{2} π_{t - p}^{n}) θ_{n}^{i n f}