Notes on the Money Market and LM Curve – Eco 3202 – Fall ...
The FE must have a mean of zero (we assume that good news is as likely as bad news). The FE must be independent of Ωt, where Ωt is the entire information set that is available at time t. If FE is not independent, that implies that St is not processing all the relevant and available information contained in Ωt, and thus, violates the ... ................
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