Bullard, James; Cho, In-Koo - Center for Financial Studies - 2003
problem which yields a consumption Eu-
ler equation given by equation (1). The monopolistically competitive firms
6 JAMES ….
13
To
simplify notation, let
x
t
=
ˆc
t
ˆ
φ
t
col(Σ
wη,t
)
col(Σ
π,t
)
(37)
and
v
t
=
·
w
t
η
t
¸
(38 …)
and write the recursive formula (30), (31), (32), (33) and (34) compactly
as
x
t+1
= x
t
+ a
t
Q(x
t
,v
t
). (39)
Remark 3 …