System dynamics modeling of ecological-economic systems

This chapter documents a multi-disciplinary collaboration among a mathematical economist, an ecological economist, and a systems scientist to demonstrate the contributions of system dynamics (SD) to the advancement of dynamic modeling in ecological economics. Ecological economics is a trans-disciplinary field that focuses on the complex interactions between ecological systems and economic systems. Considering these systems as a unified ecological-economic system (EES) allows for analyses that overcome the limitations of neoclassical approaches and thereby facilitate understanding of complex policy issues and failures. Modeling EESs is one of the key research areas for ecological economics. The foundation for this chapter is a model by Brander and Taylor in Am Econ Rev 88:119–138, Brander and Taylor, .American Economic Review 88:119-138, 1998) (henceforth, the BT model) that represents an EES. We discuss two extensions to the BT model that utilize economic theory in conjunction with the SD modeling approach. These extended models reveal important insights about EESs that could not have been found without SD modeling approaches.