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212
Economic Dynamics
Figure 5.1.
i.e.
x
t
+
1
−
x
∗
=−
7
.
7526(0
.
7262)
t
+
3
.
3526(
−
0
.
8262)
t
y
t
+
1
−
y
∗
13
.
3827(0
.
7262)
t
+
5
.
827(
−
0
.
8262)
t
This procedure does give insight into the dynamics and it is possible to plot the
solutions. However, if interest is purely in the dynamics of the trajectory, this can
be obtained immediately using a spreadsheet. Once the equations for
x
t
+
1
and
y
t
+
1
have been entered in the Frst cells they are then copied down for as many periods
as is necessary and the
{
x
t
,
y
t
}
coordinates plotted on the
x

y
line plot, as shown in
Fgure 5.1. This simple procedure also allows plots of
x
(
t
) and
y
(
t
) against time.
2
The solution generalises to more than two equations. If
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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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