Population ecology, Sustainability, Endogenous growth (Economics)
We build and analyze a dynamic ecological economic model that incorporates endogenous innovation on input substitutability. The use of the system dynamics method allows us to depart from conventional equilibrium thinking and conduct an out-of-equilibrium (adaptation) analysis. Simulation results show that while improvement in input substitutability will expand an economy, this change alone may not improve sustainability measured by indicators such as utility-per-capita and natural resource stock. It could, however, be possible that in combination with other technological progress, improvement in input substitutability will contribute to sustainable development. Sensitivity analysis also indicates a possible complication with the use of exogenous consumer preference, which is often assumed in standard economics.
Uehara, Takuro, Yoko Nagase, and Wayne Wakeland. “System dynamics implementation of a model of population and resource dynamics with adaptation”, Proc.12th Biennial Conf. Int’l Soc. for Ecological Economics, Rio de Janeiro, Brazil, June, 2012.