Approximation by Moving Equilibrium

The analysis of multivariate dynamical models can sometimes be
considerably simplified by the assumption that one or several
variables move infinitely fast to their equilibrium values. The
method is known as the ‘moving equilibrium method’. Various
dynamical theories that build on equilibrated markets presuppose
the validity of this method. The method is discussed and a theorem
-- the moving equilibrium theorem -- is provided that establishes
the validity of the approximation in the linear case.