archived_user
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- Jun 18, 2026
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Following sentence appears under Table 10 of Example 10 in SS11:
If the exchange rate is a random walk, its current value will be an extremely good predictor of its value in the next period, and thus the R2 will be extremely high. At the same time, if the exchange rate is a random walk, then changes in the exchange rate should be completely unpredictable
Might this be an Erratum?
If the exchange rate is a random walk, its current value will be an extremely good predictor of its value in the next period, and thus the R2 will be extremely high. At the same time, if the exchange rate is a random walk, then changes in the exchange rate should be completely unpredictable
Might this be an Erratum?