Given $x_0=1$ and $x_j=x_{j-1}\frac{N-(j-1)}{N}+x_{j+1}\frac{j+1}{N}$ for $j=1,...,N-1$, the formula $x_j={N\choose j}$ can be proven by induction. I do not see why we are able prove it by induction, seeing that using induction, we prove the base case, we assume the formula holds for n, then show it holds for n+1, then we claim it holds for every integer. In this case it only holds up to N-1. So why does the induction proof work? I think that the induction proof should fail.
The inductive proof: $x_0=1$, Suppose the result is true for $k \le j$
$$\begin{align}x_{j+1} &=\frac{N}{j+1}\left(x_j-\frac{N-j+1}{N}x_{j-1}\right)\\&=\frac{N}{j+1}\left(\frac{N!}{j!(N-j)!}-\frac{N-j+1}{N}\frac{N!}{(j-1)!(N-j+1)!}\right)\\ &\text{after some simplification}\\&={N\choose{j+1}} \end{align}$$
See it works but I think that it should fail.