| Abstract [eng] |
The circular economy (CE) is referred to as a practical strategy for implementing sustainability and is seen as the opposite pole of the linear economic system, focusing on eco-design products and cleaner production. One of the catalysts for CE is investment in technologies that are sensitive to changing economic conditions. The aim of the study is to assess the impact of different technology investments on a small open economy transitioning to a circular economy. The dynamic stochastic general equilibrium model developed is a new tool to assess the impact of technology investments on changes in a small open economy due to implemented policy actions. In addition, the model is designed to analyse the behaviour of typical economic agents (households, final goods and intermediate goods firms, and government) and a novel agent – the circular goods firm. Variables for consumption, production, environmental quality and government policy are included. The empirical results confirm that different types of technology investments have different effects on a country's transition to CE. Investments in non-environmental technologies bolster firm productivity, leading to elevated consumption and increased waste due to heightened production. Conversely, investments in circular goods, abatement, eco-design, and resource recovery technologies facilitate process enhancements and/or increased production of more sustainable goods, exerting a positive influence on the CE. |
