Question: Permanent and Temporary Shocks: Expectations Several Steps Ahead We studied in appendix 3.1 how to predict the next realization of a stochastic process, which is

Permanent and Temporary Shocks: Expectations Several Steps Ahead We studied in appendix 3.1 how to predict the next realization of a stochastic process, which is the sum of two nonobservable stochastic processes with different autoregressive roots: with: U E + 1-pL 1-C 0 p

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