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Foundations Of Modern Macroeconomics

ISBN: 9781264857937

1st Edition

Authors: Ben J. Heijdra, Frederick Van Der Ploeg

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Question Posted: Nov 12, 2024 06:00 AM

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Obviously, Et_iEt_ipt = Et_ipt, but what does Et_1Et_2pt mean? In words, it represents what agents expect (using period t 1 information) to expect in period t 2 about the price level in period t....
If we now substitute (3.41) and (3.43) into (3.39), the REH solution for the price level is obtained: 5pt 4Et-imt + Et_2mt + 1(vt - ) + -61Et_i(vt - ut) + 3Et_2(vt - ut ). (3.44) This can be...
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Foundations Of Modern Macroeconomics

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