Dillén, Hans (contributor) - 2008
, stochastic
changes in the state variable, x, will alter the expectations of future monetary policy and thus
affect long term …(t,T) =
∫− Tt duur
t eE
)( , (8)
where tE denotes expectations conditional on information known at time t. Bond pricing
formula … assumption because we want to focus on the role of monetary policy
expectations (i.e. expectations of future values of the …