[85] This indeed seems to be happening in Holland 1990-2005.
[86] I have considered to use the word ‘stable’ instead of ‘constant’, as so many authors write ‘stable inflation’. But again, as ‘accelerating inflation’ is not correct, so is ‘stable’ not correct. A constant rate of inflation can be the only constant in a sea of instability. To allow for a later definition of a ‘stable rate’, it is advisable to pronounce CIRU and CWIRU as KIRU and KWIRU, and not as SIRU and SWIRU.
[87] In a dynamic setting u[-1] will have a greater weight. The equation used here can be regarded to some extent as a longer run relation.
[88] Use
* =
, solve (28.2) for f[u] and solve (28.3) for f[E[u]; and the rhs’s are equal.
[89] Remember that