Determinants of Circular Economy: An Empirical Approach in the Context of the United States of America

Abstract

The USA is the world’s largest economy in terms of the consumption of resources. The excessive and irresponsible consumption of resources in the developed countries has jeopardized the stock of global resources. This quantitative study highlighting the importance of the circular economy (CE), has assessed the factors that would support the circular transition in the USA. Time series analysis based on the Autoregressive Distributed Lag (ARDL) model was employed to analyze the impact of Gross Domestic Product (GDP) per capita, Research and Development expenses, and Renewable Energy consumption on circular economy in the US with annual data from 1971 to 2017. While the study indicated the existence of a long-run relationship between the GDP per capita and renewable energy consumption, no relationship was observed between research and development expenses and the circular economy. The study strongly emphasizes the need for policy interventions to enhance the level of awareness regarding circular economy, increase consumption of renewable energies and steering investments in research and development activities to support CE activities in the USA.