p840-0326

# p840-0326 - equation 3 Given your solutions to the...

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Econ 840 Exercise for March 26 De Jong, Spring 2008 Answer the question below for Wednesday’s class. The questions below are about diﬀerence equations, and about a deterministic sequence y t . Below, i denotes - 1. 1. Consider the equation y t = 0 . 25 y t - 1 . Solve y t as a function of t and y 0 . 2. Consider the equation y t = 0 . 25 y t - 1 + 2. If y t converges to y as t goes to inﬁnity, then what value must y be? Verify that y t = y is a solution to the above diﬀerence
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Unformatted text preview: equation. 3. Given your solutions to the questions above, can you now solve the diﬀerence equation y t = 0 . 25 y t-1 + 2? 4. Consider next the diﬀerence equation y t = 0 . 5 iy t-1 . Solve this diﬀerence equation and show that y t converges to zero as t → ∞ . 5. Finally, consider the diﬀerence equation y t = iy t-1 . Show that y t does not converge as t → ∞ . 1...
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## This note was uploaded on 07/17/2008 for the course ECON 840 taught by Professor De jong during the Spring '08 term at Ohio State.

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