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Two moment conditions, one parameter

For a Poisson(λ)(\lambda), both the mean and the variance equal λ\lambda. That gives you two moment conditions but only one parameter to estimate.

Explain what "more conditions than parameters" means, why it is useful rather than a problem, and how the generalized method of moments resolves the surplus.

Your answer

This one is open-ended. Work it through, then check your reasoning against the full solution.

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