I have this VAR equation
$\begin{pmatrix} s_t\\ f_t \end{pmatrix} = \frac{\begin{pmatrix} 1-0.4L & 0.3L\\ -0.6L & 1-0.1L \end{pmatrix}}{(1-0.1L)(1-0.4L)+0.18L^2} \begin{pmatrix} 0.5\\0.7\end{pmatrix} + \begin{pmatrix}ε_t\\ η_t\end{pmatrix} $
This has been written as: $s_t =0.51+0.5s_{t1}-0.22s_{t-2}+ε_t-0.4ε_{t-1}+0.3η_{t-1}$ And $f_t=0.33+0.5f_{t1}-0.22f_{t-2}+η_t-0.6ε_{t-1}+0.1η_{t-1}$
I have absolutely no idea how the fraction with the two matrices is solved and transformed into two equations, could someone explain how this is done ? I only know how to compute the inverse of a matrix when it involves actual numbers only and in this case I’m Absolutely clueless
I tried to bring the denominator to the left but then I realised the matrix is then left on its own and I’m not sure how to proceed after that step
Thanks :)