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A note on Wiener-Kolmogorov prediction formulas for rational expectations models


Abstract: A prediction formula for geometrically declining sums of future forcing variables is derived for models in which the forcing variables are generated by a vector autoregressive-moving average process. This formula is useful in deducing and characterizing cross-equation restrictions implied by linear rational expectations models.

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Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 1981

Number: 69