Economics Research Institute Study Paper
Utah State University Department of Economics
We use the theory of continuous-time Markov chains (CTMCs) to analyze hitherto unstudied questions about jointly determined ecological-economic systems. Two specific questions are examined. First, on the methodological front, we show how the theory of CTMCs can be used to effectively model dynamic and stochastic ecological-economic systems. Then, given recent concern about the sustainability of desirable states and lock-in into undesirable states, we partition the state space of our stylized ecological-economic system into good and bad states, and demonstrate the formal relationship between these two sets of states. Second, we discuss a way of looking at the task of managing ecological-economic systems that captures this formal link between the good and the bad states, and has other desirable properties.
Batabyal, Amitrajeet A., "A Theoretical Inquiry Into Aspects of the Structure and the Management of Ecological-Economic Systems" (2000). Economic Research Institute Study Papers. Paper 195.