An Endogenous Economic Growth Model: Analyzing the Sustainable Development in China

The purpose of this paper is to discuss the sustainable development in China by building a theoretic model based on the R&D model. A major difference to the former models is that the model presented here considers exhaustible energy, pollution control which are endogenously determined. The method of optimal control is employed to obtain the balance growth solutions. The Results show that a dynamic relations must be satisfied between economic growth and the rate of energy depletion, the proportion of pollution control. These relations provide an alternative theoretical criterion when assessing the effect of various energy policies.