IDEAS home Printed from https://ideas.repec.org/a/kap/netspa/v22y2022i3d10.1007_s11067-022-09559-8.html
   My bibliography  Save this article

A Circular Economy Model of Economic Growth with Circular and Cumulative Causation and Trade

Author

Listed:
  • Kieran P. Donaghy

    (Cornell University)

Abstract

The idea of a circular economy, first discussed by Kenneth Boulding in the 1960s and ‘70 s and reintroduced by environmental economists David Pearce and R. Kerry Turner in 1990, is a characterization of how goods and services can be produced and consumed in an ecologically sound and environmentally sustainable manner that meets concerns of overuse of resources, waste management, and climate change, inter alia, through the conscious interlinking of disparate economic activities. The notion of circular and cumulative causation (CCC), through which certain positive and negative effects are promoted and reinforced by positive feedbacks, also is not new. George et al. (2015) have presented a theoretical circular economy model of economic growth that leads them to infer that the maintenance or improvement of environmental quality is incompatible with economic growth. However, Donaghy (2021b) has demonstrated how, when sources of CCC are introduced to the model of George et al., a different conclusion may be reached; CCC may be harnessed to bring about desirable systems properties, such as those of a circular market economy. The present paper reviews the arguments and findings of the latter two studies and extends the analysis by introducing trade between three national or regional economies in an environmentally polluting resource, other materials, and recycling technologies. Results of numerical simulation exercises suggest that there could be gains from trade in terms of progress by multiple economies in aggregate towards an international or interregional circular growth economy. The paper also suggests how aspects of the Pearce and Turner model of a circular economy not presently included in theoretical circular economy models of economic growth (closed or open) can be accommodated.

Suggested Citation

  • Kieran P. Donaghy, 2022. "A Circular Economy Model of Economic Growth with Circular and Cumulative Causation and Trade," Networks and Spatial Economics, Springer, vol. 22(3), pages 461-488, September.
  • Handle: RePEc:kap:netspa:v:22:y:2022:i:3:d:10.1007_s11067-022-09559-8
    DOI: 10.1007/s11067-022-09559-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11067-022-09559-8
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11067-022-09559-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Cartwright,Nancy, 2007. "Hunting Causes and Using Them," Cambridge Books, Cambridge University Press, number 9780521860819, October.
    3. Stephen J. Turnovsky, 1997. "International Macroeconomic Dynamics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262201119, April.
    4. Richard E. Baldwin & Philippe Martin & Gianmarco I. P. Ottaviano, 2021. "Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 2, pages 25-57, World Scientific Publishing Co. Pte. Ltd..
    5. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    6. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 29-45.
    7. Cartwright,Nancy, 2007. "Hunting Causes and Using Them," Cambridge Books, Cambridge University Press, number 9780521677981, October.
    8. William Brock & M. Taylor, 2010. "The Green Solow model," Journal of Economic Growth, Springer, vol. 15(2), pages 127-153, June.
    9. John Hartwick, 1977. "Intergenerational Equity and the Investment of Rents from Exhaustible Resources in a Two Sector Model," Working Paper 281, Economics Department, Queen's University.
    10. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    11. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    12. Gianfranco Piras & Kieran Donaghy & Giuseppe Arbia, 2007. "Nonlinear regional economic dynamics: continuous-time specification, estimation and stability analysis," Journal of Geographical Systems, Springer, vol. 9(4), pages 311-344, December.
    13. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    14. Pindyck, Robert S, 1978. "The Optimal Exploration and Production of Nonrenewable Resources," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 841-861, October.
    15. Runde, Jochen, 1998. "Assessing Causal Economic Explanations," Oxford Economic Papers, Oxford University Press, vol. 50(2), pages 151-172, April.
    16. Veblen, Thorstein, 1915. "Imperial Germany and The Industrial Revolution," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1915.
    17. Patrick T. Harker, 1986. "Alternative Models of Spatial Competition," Operations Research, INFORMS, vol. 34(3), pages 410-425, June.
    18. Steven N. Durlauf, 2005. "Complexity and Empirical Economics," Economic Journal, Royal Economic Society, vol. 115(504), pages 225-243, June.
    19. Kieran P. Donaghy & Clifford R. Wymer, 2011. "Econometric Estimation of Non-linear Continuous-Time Models of Intertemporally Optimizing Agents," World Scientific Book Chapters, in: Amitrajeet A Batabyal & Peter Nijkamp (ed.), Research Tools In Natural Resource And Environmental Economics, chapter 8, pages 223-253, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dolores R. Santos-Peñate & Rafael R. Suárez-Vega & Carmen Florido de la Nuez, 2023. "A Location-allocation Model for Bio-waste Management in the Hospitality Sector," Networks and Spatial Economics, Springer, vol. 23(3), pages 611-639, September.
    2. David G. Green, 2023. "Emergence in complex networks of simple agents," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 18(3), pages 419-462, July.
    3. Aura Reggiani, 2022. "The Architecture of Connectivity: A Key to Network Vulnerability, Complexity and Resilience," Networks and Spatial Economics, Springer, vol. 22(3), pages 415-437, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Barbier,Edward B., 2007. "Natural Resources and Economic Development," Cambridge Books, Cambridge University Press, number 9780521706513.
    2. Brock, William A. & Taylor, M. Scott, 2005. "Economic Growth and the Environment: A Review of Theory and Empirics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 28, pages 1749-1821, Elsevier.
    3. Toman, Michael & Pezzey, John C., 2002. "The Economics of Sustainability: A Review of Journal Articles," RFF Working Paper Series dp-02-03, Resources for the Future.
    4. Perrings, Charles, 2014. "Environment and development economics 20 years on," Environment and Development Economics, Cambridge University Press, vol. 19(3), pages 333-366, June.
    5. David I. Stern, 2010. "The Role of Energy in Economic Growth," CCEP Working Papers 0310, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    6. Thomas Gries, 2006. "SEZ, Regional Development and Disparity," EcoMod2006 272100033, EcoMod.
    7. Louis Dupuy & Matthew Agarwala, 2014. "International trade and sustainable development," Chapters, in: Giles Atkinson & Simon Dietz & Eric Neumayer & Matthew Agarwala (ed.), Handbook of Sustainable Development, chapter 25, pages 399-417, Edward Elgar Publishing.
    8. Voosholz, Frauke, 2014. "A survey on modeling economic growth. With special interest on natural resource use," CAWM Discussion Papers 69, University of Münster, Münster Center for Economic Policy (MEP).
    9. Gregor Semieniuk, 2016. "Fossil energy in economic growth: A study of the energy direction of technical change, 1950-2012," SPRU Working Paper Series 2016-11, SPRU - Science Policy Research Unit, University of Sussex Business School.
    10. Kenneth Arrow, 2000. "Increasing returns: historiographic issues and path dependence," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 7(2), pages 171-180.
    11. Maurseth, Per Botolf, 2001. "Convergence, geography and technology," Structural Change and Economic Dynamics, Elsevier, vol. 12(3), pages 247-276, September.
    12. Ali, Qamar & Yaseen, Muhammad Rizwan & Anwar, Sofia & Makhdum, Muhammad Sohail Amjad & Khan, Muhammad Tariq Iqbal, 2021. "The impact of tourism, renewable energy, and economic growth on ecological footprint and natural resources: A panel data analysis," Resources Policy, Elsevier, vol. 74(C).
    13. Partha Sen, 2020. "Macroeconomics and the Environment: A Selective Survey," CESifo Working Paper Series 8159, CESifo.
    14. Elkhan Richard Sadik‐Zada, 2021. "Natural resources, technological progress, and economic modernization," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 381-404, February.
    15. Hart, Rob, 2012. "The economics of natural resources: Understanding and predicting the evolution of supply and demand," Working Paper Series 2012:01, Swedish University of Agricultural Sciences, Department Economics.
    16. Antonio Fernández-Portillo & Manuel Almodóvar-González & José Luís Coca-Pérez & Héctor Valentín Jiménez-Naranjo, 2019. "Is Sustainable Economic Development Possible Thanks to the Deployment of ICT?," Sustainability, MDPI, vol. 11(22), pages 1-15, November.
    17. John L. Pender & Jeremy G. Weber & Jason P. Brown, 2014. "Sustainable Rural Development and Wealth Creation," Economic Development Quarterly, , vol. 28(1), pages 73-86, February.
    18. Miguel A. León-Ledesma, 2002. "Cumulative Growth and the Catching-Up Debate From a Disequilibrium Standpoint," Palgrave Macmillan Books, in: John McCombie & Maurizio Pugno & Bruno Soro (ed.), Productivity Growth and Economic Performance, chapter 8, pages 197-218, Palgrave Macmillan.
    19. Tobias Kronenberg, 2008. "Should We Worry About The Failure Of The Hotelling Rule?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(4), pages 774-793, September.
    20. Wilson, E.J. & Chaudhri, D.P., 2000. "Endogeneity, Knowledge and Dynamics of Long Run Capitalist Economic Growth," Economics Working Papers wp00-03, School of Economics, University of Wollongong, NSW, Australia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:netspa:v:22:y:2022:i:3:d:10.1007_s11067-022-09559-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.