Discrete-continuous time optimal growth models

Abstract

Optimal growth models have been either of discrete - or continuous - time formulation. This paps
breaks away from this tradition. It considers a model in which consumption takes place at discrete time:
while production is continuous, and a model with consumption at all points in time, while output :
produced at discrete times. Such formulations make sense and are realistic. First order conditions ar
obtained and it is shown that they characterize unique globally optimal solutions. These conditions ar
interpreted and their relation to the Euler equation is explained. The discussion reveals a number c
interesting aspects of the two models.