Nash Equilibrium Mechanic of Environmental and Human Capital
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Abstract:
The externality of surrounding is introduced into the 2-capital of economical increasing models, which includes human factors, to explore the influences of circumstances contradiction on the human capital formation. The normal and special nash equilibrium of environmental and human capital is presented through a limited boundary model of overlapping generations. The character of equilibrium trail and its economical meaning are examined. The study on the model shows that laissez faire economy will be either stagnant,growing,or collapsing in the long-run,depending on the returns of the learning technology with respect to the two kinds of capital,the initial state of economy,and the relative price of the environmental and consumption goods.
