Mathematics for Economists

Phase diagram in two dimension

A saddle point.

x^0 =



1 1

4 1



x

x ' = A x + B yy ' = C x + D y A = 1C = 4B = 1D = 1

-5 -4 -3 -2 -1 0 1 2 3 4 5

-5

-4

-3

-2

-1

0

1

2

3

4

5

x

y