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Ethan Frome is a story-within-a-story narrative. The reader is being told what happened twenty-four years ago within the framework of the present time. The reader can consider the narrator reliable during the account of the narrative frame of the present. Everything else that happens in the past years ago is not as reliable since it's subject to the narrator's interpretations of the events. The reader cannot be sure if the younger Ethan Frome really felt the way the narrator said he did or if the reasons for Ethan's actions are what the narrator says they are. This leaves the reader having to judge for him/herself whether the narrator's accounting of past events is true or not. We must decide for ourselves.
The "un-named" narrator helps build the sense that this is a case study - a family (such as it is) that should be observed, studied and learned from. There is much to see and understand about the human condition through the characters. As well, without the un-named narrator, who stays with Ethan during a fierce storm, there really is no way to tell their story.
As a third person narrator he's unreliable for several reasons. First of all, he doesn't ponder what Zeena or Mattie think or feel, but only how they might have appeared to Ethan in the past, and Ethan is definitely biased in favor of Mattie. Also, the narrator has already told us (in the Prologue) that his "vision" of Ethan's story is a combination his imagination and of each townsperson's "different" story (Prologue.65.; Prologue.1), which may or may not be accurate. Since none of these townspeople could have seen most of the events, they can't be considered reliable sources of information.
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