You can also use RecurrenceTable, NestList, and the memoized version of the method in @David's answer:
ClearAll[rt1, rt2, rt3, aa, bb]
rt1 = Transpose@RecurrenceTable[{a[n] == 0.7 a[n - 1] + 0.002 a[n - 1] b[n - 1],
b[n] == 1.2 b[n - 1] - 0.001 a[n - 1] b[n - 1],
a[0] == 150, b[0] == 200}, {a, b}, {n, 0, #}] &;
rt2 = Transpose[NestList[{0.7 #[[1]] + 0.002 #[[1]] #[[2]],
1.2 #[[2]] - 0.001 #[[1]] #[[2]]} &, {150, 200}, #]] &;
aa[n_] := aa[n] = 0.7 aa[n - 1] + 0.002 aa[n - 1] bb[n - 1];
bb[n_] := bb[n] = 1.2 bb[n - 1] - 0.001 aa[n - 1] bb[n - 1];
aa[0] = 150; bb[0] = 200;
rt3 = Transpose@Table[{aa[n], bb[n]}, {n, 1, #}] &;
Row[ListPlot[#@100, BaseStyle -> PointSize[Large],
ImageSize -> 300] & /@ {rt1, rt2, rt3}, Spacer[5]]

Ois a protected symbol; try a different name, preferably starting with a lower case letter. – b.gates.you.know.what Apr 10 '15 at 20:34OwithoandMwithm. I am therefore closing this question as a simple mistake. – Mr.Wizard Jan 19 '17 at 23:37