Hi all--
I can't figure out how to approach the following difference equation:
ax_{t}+f(x_{t-1})+bx_{t-2}=e_{t}
where a, b are constants, e_t is a known function and f(x_t-1) is a convex, u-shaped function that goes through the origin.
(Sorry Tex would not want to work)
To begin with, I...