A GROWTH RATE FOR A SUSTAINABLE ECONOMY

A sustainable growth rate – i.e. a growth rate which allows economy to expand without compromising the equilibrium of the natural system – is one of the most important and stimulating topics in growth literature. In this paper two findings will be presented. First of all, a brief discussion of both concepts – growth and development – is presented. A new sight for their relationship is suggested. The usual distinction between quantitative and qualitative variables is shown to be unsatisfactory. Growth and development must fit in a sustainability framework and therefore, progress should be based on steps of sustainable economic growth in order to have higher development levels. Secondly, a two-sector-closed-economy model is presented to demonstrate the existence of a positive sustainable growth rate for the GDP