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Life Cycle of Products and Cycles

Author

Listed:
  • Jean De Beir

    () (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne)

  • Mouez Fodha

    () (CES - Centre d'économie de la Sorbonne - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics)

  • Francesco Magris

    () (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne)

Abstract

The 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.

Suggested Citation

  • Jean De Beir & Mouez Fodha & Francesco Magris, 2008. "Life Cycle of Products and Cycles," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00348862, HAL.
  • Handle: RePEc:hal:cesptp:halshs-00348862
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00348862
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    References listed on IDEAS

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    1. Fullerton, Don & Wu, Wenbo, 1998. "Policies for Green Design," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 131-148, September.
    2. Fullerton Don & Kinnaman Thomas C., 1995. "Garbage, Recycling, and Illicit Burning or Dumping," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 78-91, July.
    3. Boldrin, Michele & Rustichini, Aldo, 1994. "Growth and Indeterminacy in Dynamic Models with Externalities," Econometrica, Econometric Society, vol. 62(2), pages 323-342, March.
    4. Rafael Lusky, 1976. "A Model of Recycling and Pollution Control," Canadian Journal of Economics, Canadian Economics Association, vol. 9(1), pages 91-101, February.
    5. Gaskins, Darius Jr., 1974. "Alcoa revisited: The welfare implications of a secondhand market," Journal of Economic Theory, Elsevier, vol. 7(3), pages 254-271, March.
    6. Valerie Y. Suslow, 1986. "Estimating Monopoly Behavior with Competitive Recycling: An Application to Alcoa," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 389-403, Autumn.
    7. Seegmuller, Thomas & Verch Re, Alban, 2007. "A Note On Indeterminacy In Overlapping Generations Economies With Environment And Endogenous Labor Supply," Macroeconomic Dynamics, Cambridge University Press, vol. 11(03), pages 423-429, June.
    8. Swan, Peter L, 1980. "Alcoa: The Influence of Recycling on Monopoly Power," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 76-99, February.
    9. Choe, Chongwoo & Fraser, Iain, 1999. "An Economic Analysis of Household Waste Management," Journal of Environmental Economics and Management, Elsevier, vol. 38(2), pages 234-246, September.
    10. Grant, Darren, 1999. "Recycling and market power: A more general model and re-evaluation of the evidence1," International Journal of Industrial Organization, Elsevier, vol. 17(1), pages 59-80, January.
    11. Palmer, Karen & Walls, Margaret, 1997. "Optimal policies for solid waste disposal Taxes, subsidies, and standards," Journal of Public Economics, Elsevier, vol. 65(2), pages 193-205, August.
    12. Martin, Robert E, 1982. "Monopoly Power and the Recycling of Raw Materials," Journal of Industrial Economics, Wiley Blackwell, vol. 30(4), pages 405-419, June.
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    Cited by:

    1. Raouf Boucekkine & Fouad El Ouardighi, 2015. "Optimal Growth with Polluting Waste and Recycling," Working Papers halshs-01126636, HAL.

    More about this item

    Keywords

    waste; Cycles; recycling; waste.; recyclage; déchets.;

    JEL classification:

    • 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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