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Unformatted text preview: one equilibrium point. However, such a Fxed point makes economic sense (i.e. for price to be nonnegative) only if the additional condition a ≥ c is also satisFed. As with Fxed points in continuous dynamic systems, a particularly important consideration is the stability/instability of a Fxed point. Let y ∗ denote a Fxed point for the discrete dynamic system y t + 1 = f ( y t ). Then (Elaydi 1996, p. 11)...
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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.
 Fall '11
 Dr.Gwartney
 Economics

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