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# Yule-Walker equation

#### Hanuman

##### New Member
Hello,
What is the calculation for converting Yt to r1 in the below text?

"For example, suppose that Yt = 1.4Yt-1 - 0.45Yt-2
This AR(2) is stationary because the roots of the characteristic polynomial are 0.9 and 0.5.
The YW equations are
r1 = 1.4 - 0.45r1
r2 = 1.4r1 - 0.45
The solutions to these are r1 = 1.4/1.45 = 0.966 and r2 = 1.42/1.45 - 0.45 = 0.902
The remaining autocorrelations are recursively computed using rj = 1.4rj - 2 - 0.45rj - 1 Using this equation, next three autocorrelation "