economy-ecology integrated model

This paper analyses ustainable development in an endogenous growth model which inte-grates a dynamic specification of both economic and ecological relations and all the interactions between the economy and the natural environment. It is common practice to solve growth models by looking at a balanced growth solution, which is often associated with sustainable development. We derive the conditions under which sustainable development is feasible and optimal. Finally, we discuss some comparative statics of the balanced growth solution and give a numerical example to illustrate the model and to provide further insight. JEL classification: O41; Q20; D6