Discrete Versus Continuous Time in an Endogenous Growth Model with Durable Consumption

Manuel Gómez

Mathematical Economics Letters, 2014, vol. 2, issue 3-4, 67-75

Abstract: The choice of time as a discrete or continuous variable may radically affect the stability of equilibrium in an endogenous growth model with durable consumption. In the continuous-time model the steady state is locally saddle-path stable with monotonic convergence. However, in the discrete-time model the steady state may be unstable or saddle-path stable with monotonic or oscillatory convergence.

Keywords: Continuous Time; Discrete Time; Durable Consumption; Endogenous Growth; Continuous Time; Discrete Time; Durable Consumption; Endogenous Growth (search for similar items in EconPapers)
JEL-codes: E21 O41 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1515/mel-2014-0012

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