An Ecological-Economic Integrated General Equilibrium Model

Abstract

A thorough analysis of sustainable development requires a better understanding of how economic and ecological systems interact over the long run. This paper provides an integrated model to analyze interactions between economic and ecological systems. The linkages between these two systems are generated by a utility function contains both economic outputs and ecological services in the demand side and by introducing land as the common input in production of economic outputs and ecological services in the supply side. The optimal allocation of land between these two systems thus determines the trade-off between economic outputs and ecological services of an ecosystem.sustainable development, ecosystem, general equilibrium, the specific-factor model of trade