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Difference equation with non-linear term

  1. Apr 27, 2009 #1
    Hi all--

    I can't figure out how to approach the following difference equation:


    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 considered f linear and solved the equation. Exactly one of the roots of the corresponding homogenous equation lies within the unit circle, so I set the free coefficients in the general solution to zero to obtain a bounded solution and derive the particular solution.

    Does anyone know a way to treat a nonlinear function f?
  2. jcsd
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