Classical texts for control theory show the linear system $\dot x=A \,x$, is stable if the real parts of the eigenvalues are negative.
Does the same criteria apply for a system of the following form: $$ \left[ \begin{array}{cc|c} \dot x\\ 0 \end{array} \right] = B \left[ \begin{array}{cc|c} x \\ y \end{array} \right]$$
where $\dot x$, $x$, $y$ are vectors and $B$ is a matrix of constants. In this system, the equations for $\dot x$ include terms from $y$. For this system the number of unknowns equals the number of equations. While it would be possible to perform additional algebra to reduce the system to the classical form, $\dot x=A\,x$, is this necessary? I would prefer to write the equations in the form above, because this makes the physical interpretation of the equations more clear.
I am calling the $y$ values "auxiliary" variables, because they are dynamic in the sense that they change with time (as a consequence of the linear system - the values $y$ do not have an explicit dependence on time), but an expression for their derivative does not fall out of the analysis. (In this system, the y equations results from a simple energy balance where no energy "hold-up" is assumed.) If there is a more appropriate description feel free to revise the question.
Because $\dot y$ does not appear on the left hand side, it is not clear to me if the classic stability test still applies.
You can infer some necessary but not sufficient conditions for stability based on the eigenvalues of B. However you are better of verifying that
$ Re[eig(B_{xx} - B_{xy} B_{yy}^{-1} B_{yx})] < 0 $
for $ B = \begin{bmatrix} B_{xx} & B_{xy} \\ B_{yx} & B_{yy} \end{bmatrix} $.