| Abstract: | Many aspects of the physical environment are affected by the process of economic growth and development, creating a need to understand the internal dynamics of environmental systems and their relation to the level and price of economic activity. The present paper sets forth a simple mathematical model of environment, and uses it to illustrate the relationship between economic development and the environment. The model incorporates dynamic features of environmental change—its self-regenerating capacity and the existence of an extinction threshold—and measures the effects of the state of development and its rate of growth in terms of extraction, consumption or destruction, and beneficial inputs. The model also allows consideration of alternative relations defining the extinction threshold, carrying capacity, and the basic growth rate of the environmental system. Both the effect of development on the environment and the reverse-feedback effect of the environment on development are considered. |
