Random Walk Expectations and the Forward Discount Puzzle
---- Acknowledgements ----
We are grateful to Adriano Rampini for comments. The paper was written while van Wincoop visited the Hong Kong Institute for Monetary Research. van Wincoop acknowledges financial support from the institute. Bacchetta acknowledges financial support by the National Centre of Competence in Research "Financial Valuation and Risk Management" (NCCR FINRISK). The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.