Economic data are available in discrete time; that is, they are time series that are available in the form of samples at a fixed frequency (for example, quarterly, monthly, daily). Similarly, most complex economic models are specified in terms of a discrete time specification. By contrast, models in physics, or things like analog circuits, are defined in continuous time: time series are defined at "all times" (the time axis is a subset of the real line). Building economic models using continuous time has been done, but doing so creates many problems. However, one of the issues with discrete time models is the choice of the sampling frequency: too low a frequency means that you might not be able to model some dynamics.…Bond Economics
Discrete Time Models And The Sampling Frequency
Brian Romanchuk
