<p>The third line of p.45 denotes: </p>

<p>$MC_{t+k|t}=\psi_{t+k|t}/P_{t+k}$</p>

<p>but this is probably not the answer you are looking for.</p>

<p>Going from eq. (9) to (10), multipliy the right-hand side by $\frac{P_{t+k}}{P_{t+k}}=1$ (you can always multiply by one), the numerator goes into $\Pi_{t-1,t+k}$ (together with $P_{t-1}$), the denominator goes into $MC_{t+k|t}=\psi_{t+k|t}/P_{t+k}$.</p>

CC BY-SA 3.0
2017-01-21T18:55:02.837Z
@EnginYILMAZ You are welcome! If you're satisfied with the response, please consider upvoting and/or accepting the answer on the left, such that it shows up as "answered" on the website.
Chris tie
CC BY-SA 3.0
2017-01-21T08:14:13.253Z
2017-01-21T08:14:13.253Z
Chris tie
<p>Monetary Policy, Inflation,
and the Business Cycle, 
Jordi Gali,
Page 45
<a href="http://elib.peaceland.edu.ng:8383/greenstone3/sites/localsite/collect/peacelan/index/assoc/HASH0139.dir/doc.pdf" rel="nofollow noreferrer">http://elib.peaceland.edu.ng:8383/greenstone3/sites/localsite/collect/peacelan/index/assoc/HASH0139.dir/doc.pdf</a></p>

<p>How does "ψ " convert to "MC"?</p>

<p>You can say Drago Bergholt solutions for Gali
<a href="http://bergholt.weebly.com/uploads/1/1/8/4/11843961/the_basic_new_keynesian_model_-_drago_bergholt.pdf" rel="nofollow noreferrer">http://bergholt.weebly.com/uploads/1/1/8/4/11843961/the_basic_new_keynesian_model_-_drago_bergholt.pdf</a>
but Drago also didn't explain this change. (page 13 )</p>

<p>Sincerely</p>

CC BY-SA 3.0
2017-01-21T00:08:14.710Z
I think you should solve the whole model to see this since the very beginning because for someone who is just looking on this equation can not say you how to proceed...
optimal control
<macroeconomics><new-keynesian-economics>
Jordi Gali optimal price setting
Engin YILMAZ
# Jordi Gali optimal price setting

(Asked by: username_0 on 2017-01-20)

Monetary Policy, Inflation,
and the Business Cycle,
Jordi Gali,
Page 45
<http://elib.peaceland.edu.ng:8383/greenstone3/sites/localsite/collect/peacelan/index/assoc/HASH0139.dir/doc.pdf>

How does "ψ " convert to "MC"?

You can say Drago Bergholt solutions for Gali
<http://bergholt.weebly.com/uploads/1/1/8/4/11843961/the_basic_new_keynesian_model_-_drago_bergholt.pdf>
but Drago also didn't explain this change. (page 13 )

Sincerely

**Tags:** macroeconomics, new-keynesian-economics

> **Comments:**
> **username_1**: I think you should solve the whole model to see this since the very beginning because for someone who is just looking on this equation can not say you how to proceed...  

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## 1 answers

### Answer by username_2 on 2017-01-21. Score: 1 | Accepted answer

The third line of p.45 denotes:

$MC\_{t+k|t}=\psi\_{t+k|t}/P\_{t+k}$

but this is probably not the answer you are looking for.

Going from eq. (9) to (10), multipliy the right-hand side by $\frac{P\_{t+k}}{P\_{t+k}}=1$ (you can always multiply by one), the numerator goes into $\Pi\_{t-1,t+k}$ (together with $P\_{t-1}$), the denominator goes into $MC\_{t+k|t}=\psi\_{t+k|t}/P\_{t+k}$.

> **Comments:**
> **username_2**: @username_0 You are welcome! If you're satisfied with the response, please consider upvoting and/or accepting the answer on the left, such that it shows up as "answered" on the website.  

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