Abstract
This study aims to examine the interaction between economic activities and material balance in Aichi Prefecture, Japan, by internalizing material flow and waste recycling activities in our previous static CGE model of wasteeconomic system. Waste generated by industries and households are treated by internal and external waste transformation activities, yielding reproduced commodities. Recycled goods are regarded as commodity supply or negative commodity inputs. Economic effects of promotion of recycling are examined by comparative static numerical simulations. From the simulation results, it is observed that material based industries such as nonferrous metal product and mining industries decline due to the high recycling rates, while assembly and tertiary industries expand followed by shift of commodity demand from intermediate demand to final demand.
