RDP 2008-10: Solving Linear Rational Expectations Models with Predictable Structural Changes
Equation (18)
y
t
=
S
¯
0
+
S
¯
1
y
t
−
1
+
S
¯
2
ε
t
+
S
¯
y
IE
t
∑
j
=
1
∞
M
¯
j
−
1
Ω
¯
22
−
1
Q
¯
2
Ψ
¯
ε
t
+
j
t
≥
T
+
1
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