Temporal aggregation in a multi-sector economy with endogenous growth

We provide a theoretical treatment of temporal aggregation in models that exhibit long-term endogenously generated steady growth; hence generalizing our previous analysis [Econometrica 62 (1994), 635-656]. We introduce the property of steady growth invariance - that the long-term growth of the continuous-time economy not be affected by the discretization - which imposes consistency restrictions on the joint formulation of preferences acid stock accumulation of the discrete-time approximation. We establish, under mild conditions, these restrictions in the form of necessary and sufficient conditions on the discretization. (C) 2001 Elsevier Science B.V. All rights reserved.