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 first 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
figure 5.1. This simple procedure also allows plots of
x
(
t
) and
y
(
t
) against time.
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 Fall '11
 Dr.Gwartney
 Economics, Economic Dynamics, xy line plot

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