Natural Capital in Economic Models

Marta Kornafel; Ivan Telega

doi:10.5604/01.3001.0014.0538

Marta Kornafel Cracow University of Economics, Faculty of Finance and Law, Department of Mathematics , Ivan Telega Cracow University of Economics, Faculty of Finance and Law, Department of Mathematics Przegląd Statystyczny. Statistical Review, vol. 65, 2018, 3, pages: 253-270 Published online: 30 January 2019 DOI 10.5604/01.3001.0014.0538

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ARTICLE

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ABSTRACT

The goal of our paper is to make a critical analysis of selected growth models that use the notion of natural capital and to construct the alternative model. In particular we treat the natural capital as a renewable resource and we use CES production function, weakening the assumption of substitutability of natural capital with other forms of capital. We investigate the optimal paths for capital and consumption, giving their characterization in the dependence on the parameters of the model. The paper ends with conclusions derived from the model.

KEYWORDS

ecological economics, sustainability, growth model, natural capital, CES production function

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