Optimal growth and land preservation

A model of optimal economic growth with a constant population subject to a constraint on the availability of land is presented. It takes account of th e dual character of land as a production factor and as a consumption good ( environmental amenities) by determining the optimal intertemporal allocatio n of land between productive and recreational uses. An extension of the ana lysis for the case of a growing population with endogenous growth based on human capital accumulation shows that if the rate of discount is not very l ow, then there exists a set of balanced growth paths compatible with a cons tant allocation of land. (C) 1998 Elsevier Science B.V. All rights reserved .