RT Journal Article
T1 The circular economy and the optimal recycling rate: A macroeconomic approach
A1 Bongers, Anelí
A1 Casas Aljama, Pablo
AB This paper studies the economic implications of the circular economy and recycling activities from a macroeconomic perspective. The paper incorporates the circular economy into an otherwise standard neoclassical dynamic general equilibrium linear economy model, in which the production function depends on capital, labor, and raw materials. Raw materials are a composite of natural resources (the linear economy) and recycled material (the circular economy). Waste is a function of consumption but can be incorporated back into production activities through recycling. We find the existence of a positive S-shaped relationship between the optimal recycling rate and economic development, indicating that increasing the circularity of the economy is a necessary condition to augment social welfare in a growing economy. The optimal recycling rate depends positively on thepollution damage and waste content of final consumption goods. Simulation of the model supports the existence of a steady-state Environmental Kuznets Curve (EKC) relationship between the stock of waste and the output in the presence of a circular economy. Finally, we find that while a permanent improvement in recycling technology has positive effects on output, expanding the circularity of the economy, an increase in the cost of natural material has harmful effects on output, increasing waste accumulation and reducing recycling.
PB Elsevier
SN 0921-8009
YR 2022
FD 2022
LK https://hdl.handle.net/10272/21944
UL https://hdl.handle.net/10272/21944
LA eng
NO Bongers, A., & Casas, P. (2022). The circular economy and the optimal recycling rate: A macroeconomic approach. In Ecological Economics (Vol. 199, p. 107504). Elsevier BV. https://doi.org/10.1016/j.ecolecon.2022.107504
NO Anelí Bongers acknowledges the financial support from the Spanish.
DS Repositorio Institucional de la Universidad de Huelva
RD 31 may 2026