Discrete-Time in Economics: An Introduction.

The article focuses on an introduction to discrete-time in economics. In the recent literature on economic dynamics, discrete-time models have steadily been gaining in popularity. In economics, as in many other fields of dynamics, both discrete-time and continuous-time models have been adopted. Traditionally, many economists have preferred differential equations; perhaps, this is partly because of the convenience of differential calculus and partly because, by limiting the number of state variables to two, it is possible to fully characterize dynamics by means of a simple two-dimensional phase diagram.