Introducing the Circular Economy to Economists

Don Fullerton, Callie W. Babbitt, Melissa M. Bilec, Shan He, Cindy Isenhour, Vikas Khanna, Eunsang Lee, Thomas L. Theis

Research output: Contribution to journalReview articlepeer-review


A circular economy (CE) would reduce both extraction and disposal by encouraging green design and circular business models, as well as repair, reuse, remanufacturing, and recycling. The CE started among architects and engineers, with little interest among economists. This article introduces CE concepts to economists, introduces key insights about the CE from other disciplines, and describes how economists can use these insights for a more complete economic analysis of policies that can better improve human welfare. An economic model of CE behavior can benefit from understanding the environmental gains from green designs based on engineering,transaction-cost savings from information based on blockchain technology, life cycle assessments based on industrial ecology, and behavioral science concepts of cultural barriers and social decision making that affect how producers and consumers respond to incentives. With various disciplines brought to bear on the subject, the combined analysis can exceed the sum of its parts.

Original languageEnglish (US)
Pages (from-to)493-514
Number of pages22
JournalAnnual Review of Resource Economics
StatePublished - 2022


  • blockchain
  • disposal
  • extraction
  • green design
  • life cycle assessment
  • recycling

ASJC Scopus subject areas

  • Economics and Econometrics


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