Economy-environment interactions in the long-run: a neo-Austrian approach

Malte Faber*, John Proops, Matthias Ruth, Peter Michaelis

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This paper describes a neo-Austrian approach to the long-run interactions between invention, innovation and technical progress on the one hand, and resource use and pollution on the other. This approach is used to construct a formal model which simulates output, capital accumulation, pollution emission, pollution abatement, etc., for a simple model economy. We begin by reviewing the role and conceptualisation of time in economic modelling. We then move on to outline neo-Austrian capital theory as an alternative to the conventional approach. We note the implications of the neo-Austrian approach for modelling resource use and pollution, and a simulation model is constructed embodying the neo-Austrian approach to the time structure of production. The two possible ways the model can be interpreted are then explored. Results from the simulation model are presented and assessed. Finally, plans for future work with this approach are described.

Original languageEnglish
Pages (from-to)27-55
Number of pages29
JournalEcological Economics
Issue number1
Publication statusPublished - 6 Mar 2002

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