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[cangan_ree] Update suggestions #518

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Jul 21, 2024
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[cangan_ree] Update suggestions #518

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4 changes: 2 additions & 2 deletions lectures/cagan_ree.md
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Expand Up @@ -94,7 +94,7 @@ m_t^d - p_t = -\alpha \pi_t^* \: , \: \alpha > 0 ; \quad t = 0, 1, \ldots, T .
$$ (eq:caganmd)

This equation asserts that the demand for real balances
is inversely related to the public's expected rate of inflation.
is inversely related to the public's expected rate of inflation with sensitivity $\alpha$.

People somehow acquire **perfect foresight** by their having solved a forecasting
problem.
Expand Down Expand Up @@ -296,7 +296,7 @@ $$
\mu_t = \mu^* , \quad t \geq T_1
$$

so that, in terms of our notation and formula for $\pi_{T+1}^*$ above, $\tilde \gamma = 1$.
so that, in terms of our notation and formula for $\pi_{T+1}^*$ above, $\gamma^* = 1$.

#### Experiment 1: Foreseen sudden stabilization

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