Metzler's Inventory Cycle Model-1-2-.jpg
I can't derive the second-order difference equation for Yt because I don't know how can I use both It and St. I tried to write St in the equation in Yt=Cte+It instead of It but when I do that and collect all of the variables with Yt in one side the other side of the eq. would be 0. I'm asking your help to explain me where should I use St and It in that equation?