Life cycle of products and cycles
AbstractThe aim of this paper is to examine whether the development of waste recycling activities can be a source of economic fluctuation. We assume that the recycling sector has four fundamental characteristics. (i) The production factors are restricted by the production of the last period. (ii) These production factors are waste for which the price determination is non-competitive. (iii) It produces a recycled good, which is a perfect substitute to th primary good. (iv) It reduces waste stream. We consider the simplest economy with an infinitely lived agent and a life cycle hypothesis for the goods. We show that the equilibrium is unique and is always determinate. In spite of the lack of indeterminacy, however, our system can display cyclical behavior, depending on some usual conditions on parameters. Namely, the steady-state may undergo a Flip and a Hopf bifurcation.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number v08091.
Length: 23 pages
Date of creation: May 2008
Date of revision:
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Cycles; recycling; waste.;
Other versions of this item:
- Jean De Beir & Mouez Fodha & Francesco Magris, 2008. "Life Cycle of Products and Cycles," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00348862, HAL.
- Jean De Beir & Mouez Fodha & Francesco Magris, 2009. "Life Cycle of Products and Cycles," Documents de recherche 09-16, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
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- Thomas Seegmuller & Alban Verchère, 2007. "A Note on Indeterminacy in Overlapping Generations Economies with Environment and Endogenous Labor Supply," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00194230, HAL.
- Martin, Robert E, 1982. "Monopoly Power and the Recycling of Raw Materials," Journal of Industrial Economics, Wiley Blackwell, vol. 30(4), pages 405-19, June.
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