Temporal aggregation in a multi-sector economy with endogenous growth

We provide a theoretical treatment of temporal aggregation in models that e xhibit long-term endogenously generated steady growth; hence generalizing o ur previous analysis [Econometrica 62 (1994), 635-656]. We introduce the pr operty of steady growth invariance - that the long-term growth of the conti nuous-time economy not be affected by the discretization - which imposes co nsistency restrictions on the joint formulation of preferences acid stock a ccumulation of the discrete-time approximation. We establish, under mild co nditions, these restrictions in the form of necessary and sufficient condit ions on the discretization. (C) 2001 Elsevier Science B.V. All rights reser ved.