Since the condition for rationality contained in restriction (7.3) rules out any systematic relation between v t, the prediction error, and lagged values of v t, it rules out by the same token any persistent deviation of y t from y * ;.
Since the condition for rationality contained in restriction (7.3) rules out any systematic relation between v t, the prediction error, and lagged values of v t, it rules out for a similar reason any persistent deviation of y t from y * ;.