Macroeconomic models for assessing the transition towards a circular economy: A systematic review

José Bruno R.T. Fevereiro, Andrea Genovese, Ben Purvis, Oriol Vallès Codina and Marco Veronese Passarella

Ecological Economics, 2025, vol. 236, issue C

Abstract: The Circular Economy (CE) paradigm has gained traction in both academic discourse and industrial practice. While a transition towards a CE is generally associated with more sustainable futures, less is known about its socio-economic feasibility. This article provides a systematic literature review of contributions to macroeconomic modelling which evaluate environmental and socio-economic impacts of CE interventions (classified in terms of closing supply chains, resource efficiency, residual waste management, and product lifetime extension). Differences in modelling approaches (Leontief input-output, macroeconometric input-output, and computable general equilibrium), and underlying assumptions relating to changes in final demand and technology, are found to be significant drivers of differences in the modelled outcomes of CE interventions. Through this review, various research gaps are identified, including addressing the challenges to sectoral and regional disaggregation (allowing for the modelling of international trade-offs), broader consideration of societal issues beyond GDP and employment (such as environmental, gender or transnational justice), and consideration of broader modelling dynamics (such as rebound effects, the interplay between demand and distribution, and real-financial interactions).

Keywords: Macroeconomic models; Ecological economics; Circular economy; CGE; Computable general equilibrium; Input-output analysis; Macroeconometric (search for similar items in EconPapers)
JEL-codes: C67 D57 E16 E17 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:236:y:2025:i:c:s0921800925001521

DOI: 10.1016/j.ecolecon.2025.108669

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