Today, economic activity is predominantly characterized by a linear transformation of natural resources to production, consumption, and (ultimately) to waste. In a world of finite natural and environmental resources, this is unsustainable. The paradigm of circular economic activity seeks to overcome this by promoting reduction and reuse of materials, and remanufacturing and recycling of products (the 4R Principle), but the consequences of its wide-scale implementation for economic dynamics, business cycles, wealth, and welfare remain unclear, and a deep understanding of the paths from linear to circular economy is still lacking. This project analyzes the effects of moving small open economies from economy in the EU) by deriving policy recommendations how a higher level of circular economy implementation linear processing of resources to a circular economy.
The goal of this project is to evaluate and extend DSGE modeling to circular economy paradigm in Lithuania (as a case of small open economy in the EU) by deriving policy recommendations how a higher level of circular economy implementation can be achieved in an efficient way.
Project funding:
Projects funded by the Research Council of Lithuania (RCL), Projects carried out by researchers’ teams
Project results:
This project is designed to contribute to the development of a sustainable economics science, thus contributing to the solution of relevant scientific tasks: elaboration of the circular economy concept, defining the circular economy ecosystem functioning, developing a dynamic stochastic general equilibrium (DSGE) model for a small open economy with circular economy elements, introducing strategic proposals.
The project will also have both practical and social impact, in fostering CE-related policy. The developed insights and recommendations will facilitate the solution of problems related to CE implementation in Lithuania, as well as in other small open economies.
Period of project implementation: 2019-06-01 - 2021-12-31
Project coordinator: Kaunas University of Technology
Project partners: Vilnius University
