RDP 9812: An Optimising Model for Monetary Policy Analysis: Can Habit Formation Help?
Equation (B4)
P
t
≅
C
0
(
1
−
γ
)
(
1
−
σ
)
+
C
0
(
1
−
σ
)
Z
0
γ
(
C
t
−
C
0
)
−
C
0
(
1
−
σ
)
Z
0
γ
(
γ
(
σ
−
1
)
−
1
)
(
σ
−
1
)
C
0
2
(
Z
t
−
C
0
)
+
β
ρ
z
E
t
P
t
+
1
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