On Wealth, Waste, and GDP Growth: A Circular Solow Model

On Wealth, Waste, and GDP Growth: A Circular Solow Model | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article On Wealth, Waste, and GDP Growth: A Circular Solow Model Yunmin Chen, Brian Chi-ang Lin, C.C. Yang This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7591700/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper extends the Solow model to incorporate circularity, whereby a portion of the waste generated by consumption is recycled into productive inputs. Because recycled waste functions as a resource, consumption contributes to capital accumulation. We explore implications of this non-standard mechanism for economic growth, showing among others: (i) in the steady state, the higher the recycling rate, all else equal, the higher the wealth-to-waste ratio, and (ii) in the transition, GDP growth surpasses that of the Solow model near the steady state, with the magnitude of this divergence rising with the share of output allocated to recycling. We conduct quantitative analysis to report three key ratios---recycling-to-output, waste-to-output, and wealth-to-waste---for the G7 countries. For the United States and Germany, we compare outcomes with and without recycling. Our finding is that Germany achieves greater wealth and GDP with recycling, whereas the United States does not. We show that, to realize economic gains from recycling, the United States needs to expand its recycling efforts. JEL Classification: O44, Q53, E21 Circular Solow Recycling Wealth Waste GDP growth Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7591700","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":521619635,"identity":"9d8d9e8b-abb9-49fc-aa9a-bdb8330bf5f0","order_by":0,"name":"Yunmin Chen","email":"","orcid":"","institution":"National Central University","correspondingAuthor":false,"prefix":"","firstName":"Yunmin","middleName":"","lastName":"Chen","suffix":""},{"id":521619636,"identity":"d76fa9d5-7b38-47f0-9c21-7b2de54e5b8b","order_by":1,"name":"Brian Chi-ang Lin","email":"","orcid":"","institution":"National Chengchi University","correspondingAuthor":false,"prefix":"","firstName":"Brian","middleName":"Chi-ang","lastName":"Lin","suffix":""},{"id":521619637,"identity":"f5915579-ffba-47c1-9bda-d4acd1bb21d4","order_by":2,"name":"C.C. 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