Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171481
Authors: 
Pittel, Karen
Amigues, Jean-Pierre
Kuhn, Thomas
Year of Publication: 
2006
Series/Report no.: 
Economics Working Paper Series 05/37
Abstract: 
In this paper we analyze the implications of recycling for long-run economic development. In contrast to former approaches, we take explicit account of the circulation of matter in the economy. Building upon a Romer (1990) type growth model we consider virgin resources and recycled wastes as essential inputs to production. These material inputs either end up as waste after consumption or are bound in the capital stock - depending on the utilization of the produced output. As accumulating wastes can be recycled and again be employed in production, the waste stock serves as a source of valuable inputs in our model. We focus on the implications of recycling-related market failures and the integration of material balances on the dynamics of the economy. It is shown that, even in the absence of environmental policy, long-run development is sustainable. Yet, optimal environmental policy can serve as a means to raise growth.
Subjects: 
non-renewable resources
recycling
endogenous growth
sustainable development
exhaustible resources
JEL: 
O41
Q01
Q3
Q53
Document Type: 
Working Paper

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