The connection between economic growth and the quality of the
environment is a popular subject. Since the second half of the 1980s,
there has been an increasingly frequent use of the term "sustainable
development", to refer to the preoccupation that the production of goods
and services may decrease standards of living. It is natural to analyze
this question from the point of view of economic models, which may be
helpful in at least identifying the main factors behind such
preoccupations and perhaps in suggesting policy measures. Indeed, models
are useful to discuss some relevant factors, like the structure of
production of the economy, the type of preferences and goals pursued by
agents, and the elements of uncertainty. This monograph will consider
some of these themes: there will be a study of the analytical framework
which can be used for the purpose of defining and analyzing
sustainability, and some discussion of how to calibrate a restricted
version of the model to empirical data. There will be also some analysis
about which type of uncertainty should be incorporated into the model,
and which objective functions may be useful for policy purposes. Also,
there will be discussions about the key variables which should be
included, and some description of a general framework.