Template-type: ReDIF-Paper 1.0
Author-Name: Omar Licandro
Author-Workplace-Name: University of Nottingham and Barcelona GSE
.
Author-Name: Luis A. Puch
Author-Workplace-Name: Universidad Complutense de Madrid and ICAE.

Author-Name:
 Jesús Ruiz
Author-Workplace-Name:
 Universidad Complutense de Madrid and ICAE.
Title: Continuous vs Discrete Time Modelling in Growth and Business Cycle Theory
Abstract: Economists model time as continuous or discrete. For long, either alternative has brought about relevant economic issues, from the implementation of the basic Solow 
	and Ramsey models of growth and the business cycle, towards the issue of equilibrium indeterminacy and endogenous cycles. In this paper, we introduce to some of those 
	relevant issues in economic dynamics. First, we describe a baseline continuous vs discrete time modelling setting relevant for questions in growth and business cycle 
	theory. Then we turn to the issue of local indeterminacy in a canonical model of economic growth with a pollution externality whose size is related to the model 
	period. Finally, we propose a growth model with delays to show that a discrete time representation implicitly imposes a particular form of time–to–build to the 
	continuous time representation. Our approach suggests that the recent literature on continuous time models with delays should help to bridge the gap between continuous 
	and discrete time representations in economic dynamics.
Classification-JEL: O40, Q50, E10, E22.
Keywords: Discrete Time, Continuous Time, Solow model, Ramsey model, Indeterminacy, Time–to–Build, Delay Differential Equations.
Length: 27 pages 
Creation-Date: 2018-10
Number: 2018-28
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doicae1828.txt
File-URL: https://eprints.ucm.es/id/eprint/50175/1/1828.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doicae:1828