Macroeconomic effects of the recycling of waste derived from imported non-renewable raw materials

The literature on waste recycling neglects the potential effects that this process can have at the aggregate level, although there are positive externalities which have not emerged in the microeconomic analysis of this phenomenon.This paper investigates the macroeconomic effects of the waste recycling process, with particular reference to a country, such as Italy, which uses many foreign non-renewable resources. We use the Keynesian multiplier theory as a theoretical framework to evaluate the potential results of an increase in waste recycling on the gross national product, the balance of payments and employment. In such a way the policy maker can better evaluate whether to promote the process considered here rather than discharging the waste in the environment.