RDP 2012-08: Estimation and Solution of Models with Expectations and Structural Changes Equation (26)

a t =   ρ a a t 1 + ε a , t MathType@MTEF@5@5@+=feaagCart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLnhiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaGaamyyamaaBaaaleaacaWG0baabeaakiabg2da9iaabccacqaHbpGCdaWgaaWcbaGaamyyaaqabaGccaWGHbWaaSbaaSqaaiaadshaaeqaaOWaaSbaaSqaaiabgkHiTiaaigdaaeqaaOGaey4kaSIaeqyTdu2aaSbaaSqaaiaadggacaGGSaGaamiDaaqabaaaaa@45C5@

Equation (27)

e t = ρ e e t 1 + ε e , t MathType@MTEF@5@5@+=feaagCart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLnhiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGcbaGaamyzamaaBaaaleaacaWG0baabeaakiabg2da9iabeg8aYnaaBaaaleaacaWGLbaabeaakiaadwgadaWgaaWcbaGaamiDaiabgkHiTiaaigdaaeqaaOGaey4kaSIaeqyTdu2aaSbaaSqaaiaadwgacaGGSaGaamiDaaqabaaaaa@44FC@