IJPAM: Volume 81, No. 3 (2012)

BALANCED GROWTH PATH
IN A CAPITAL-RESOURCE GROWTH MODEL

Paolo Russu
DiSEA Department of Economics and Business
University of Sassari
Via Muroni 25, 07100 Sassari, ITALY


Abstract. We study a growth model with environmental externalities where a single consumption good is obtained using a renewable resource in combination with physical capital. Both inputs are essential for production and technical substitutes. In this context we analyze the issues of sustainability, long-run, associated with the competitive equilibrium solution trajectories. We show that long-run growth and sustainability are both compatible in a natural resource based production economy.

Received: August 13, 2012

AMS Subject Classification: 37N40, 35B50, 37N35, 91B76

Key Words and Phrases: environmental economics, balanced growth path, optimal control

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Source: International Journal of Pure and Applied Mathematics
ISSN printed version: 1311-8080
ISSN on-line version: 1314-3395
Year: 2012
Volume: 81
Issue: 3