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Unformatted text preview: + b t Y Y t = b t Y a 1 b + a 1 b Itisclearfromthisresultthatif | b | < 1thentheseriesconvergesontheequilibrium. If 0 < b < 1, there is steady convergence; while if 1 < b < 0, the convergence oscillates. If | b | > 1, the system is unstable. Case (ii) a k = a and b = 1 for all k In this case Y t = a + Y t 1 with result Y t = a t 1 k = (1) t 1 k + Y i.e. Y t = at + Y...
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- Fall '11