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Transition from a Linear Economy toward a Circular Economy in the Ramsey Model

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  • Kiyoka Akimoto

    () (Graduate School of Economics, Osaka University)

  • Koichi Futagami

    () (Graduate School of Economics, Osaka University)

Abstract

We construct a Ramsey-type model where households recycle waste generated by con- sumption and the non-recycled waste has negative externality. The aim of this paper is the following two points. Firstly, we examine a structural change process from \a linear economy" based on consumption-disposal toward \a sound material-cycle economy" or \a circular economy" based on consumption-recycling. Secondly, we examine dynamics of op- timal consumption tax and recycling subsidy. Additionally, we discuss the Environmental Kuznets Curve (EKC). Previous theoretical literature explains the mechanism of the EKC through changes in production sectors such as an introduction of abatement technology or technological change. In contrast, this paper tries to explain the EKC through the aforementioned structural change process.

Suggested Citation

  • Kiyoka Akimoto & Koichi Futagami, 2018. "Transition from a Linear Economy toward a Circular Economy in the Ramsey Model," Discussion Papers in Economics and Business 18-09, Osaka University, Graduate School of Economics.
  • Handle: RePEc:osk:wpaper:1809
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    References listed on IDEAS

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    5. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
    6. Rafael Lusky, 1976. "A Model of Recycling and Pollution Control," Canadian Journal of Economics, Canadian Economics Association, vol. 9(1), pages 91-101, February.
    7. Vernon L. Smith, 1972. "Dynamics of Waste Accumulation: Disposal versus Recycling," The Quarterly Journal of Economics, Oxford University Press, vol. 86(4), pages 600-616.
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    12. Hill, Robert J & Magnani, Elisabetta, 2002. "An Exploration of the Conceptual and Empirical Basis of the Environmental Kuznets Curve," Australian Economic Papers, Wiley Blackwell, vol. 41(2), pages 239-254, June.
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    More about this item

    Keywords

    Economic growth; Environmental Kuznets Curve; Environmental policies; House- hold waste recycling; Ramsey Model;

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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