Recycling and endogenous cycles

Mouez Fodha (1) , Francesco Magris (2)

1 PSE - Paris School of Economics
2 GERCIE - Groupe d'Etudes et de Recherche sur la Coopération Internationale et Européenne

This article investigates the conditions under which deterministic cycles can emerge in a discrete-time model with infinitely lived agents and when the economy is characterized by two sectors producing two perfectly substitutable goods: a virgin good and a recycled one. The occurrence of deterministic fluctuations rests upon the countercyclical behavior of the recycling industry: an increase in present consumption implies a lower future waste activity together with a lower agents' total income, yielding a decline in next period consumption.

Mots clés: Endogenous fluctuations; Recycling activity

Domaines: Interfaces continentales, environnement; Milieux et Changements globaux

Mouez Fodha, Francesco Magris. Recycling and endogenous cycles. The Economic Research Guardian, 2012, 2 (2), pp.241-250. ⟨insu-00925701⟩