Economics Dynamics Problems 29

Economics Dynamics Problems 29 - x ∗ 2 has a slope...

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Introduction 13 x t =(f( x t 1 )) Figure 1.2. Observation of these lines indicates that for equilibrium points x 1 and x 3 the linear approximation has a slope less than unity. On the other hand, the linear approxi- mation about
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Unformatted text preview: x ∗ 2 has a slope greater than unity. It is this feature that allows us to deal with the dynamics of a nonlinear system – so long as we keep within a small neighbourhood of a Fxed point....
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This note was uploaded on 12/14/2011 for the course ECO 3023 taught by Professor Dr.gwartney during the Fall '11 term at FSU.

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