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If I am given a couple of equations asking to write out the equations for which ∆Y_{t}=∆X_{t}=0:

∆Y_{t}=–0.5(Y_{t}–Y*)+0.3(X_{t}–X*)

∆X_{t}=0.4(Y_{t}–Y*)–0.3(X_{t}–X*)

It is also known that Y_{t}and X_{t}are endogenous and Y* and X* are steady-state values (if this helps).

Any hints on how to proceed?

I started with this:

–0.5(Y_{t}–Y*)+0.3(X_{t}–X*) = 0

0.4(Y_{t}–Y*)–0.3(X_{t}–X*) = 0

I just don't know what to do with extra Y* and X*. Any help is greatly appreciated.

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# Homework Help: Write out the equations ∆Y and ∆X

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