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- > 1. The remaining three eigenvalues are solutions to the cubic equation r3 + a2r2 + a1r + a0 = 0, where a2 = -1 -1 -1 + (1 - 1) a1 = + (1 - ) + (1 + ) a0 = -. For determinacy two of these three eigenvalues must be outside the unit circle and one eigenvalue must lie inside the unit circle. By Proposition C.2 of Woodford (2003) this is the case if and only if either of the following two cases are satisfied: (Case 1): 1 + a2 + a1 + a0 < 0, -1 + a2 - a1 + a0 > 0; (Case 2): 1+a2 +a1 +a0 > 0, -1+a2-a1 +a0 < 0, & |a2| > 3 or a2 0-a0a2 +a1-1 > 0; where 1 + a2 + a1 + a0 = (-1)(1-) and-1 + a2 - a1 + a0 = -2(1+) - (1+)(1-) -(1+2) . By inspection, Case (1) is not obtainable since the second inequality is never satisfied. The first inequality of Case (2) requires > 1, the second inequality is always satisfied and the final two inequalities yield (27) and (28) respectively.
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