Towards a Sustainable Future: Economic Cybernetics in Analyzing Romania’s Circular Economy

Abstract

The Circular Economy represents an essential strategy for a more sustainable future, both for the environment and for the economy and society. The main purpose of this article is to conduct a holistic analysis that highlights Romania’s perspectives in the transition and integration process towards the Circular Economy. In this research, we will use economic cybernetics and complex adaptive systems to uncover the complexity of the Circular Economy. Our aim is also to identify the connections and interactions among its various components. To complete this holistic analysis framework, multiple linear regression (MLR) and autoregressive distributed lag (ARDL) models were employed. MLR was applied to assess the impact of variables such as Waste per capita, Recycling rate by region, Labor productivity, Production of environmental goods, and Circular material use rate on real Gross Domestic Product (GDP) per capita. The time series are extracted from Eurostat databases and cover the period 2010–2021. Given the results obtained through MLR, we applied the ARDL model to study the long-run and short-run causal impact of independent variables on real GDP per capita. The analysis results led us to create an ARDL model from another perspective, namely, to examine how greenhouse gas emissions from production activities and labor productivity per person employed and hour worked affect the generation of municipal waste per capita. Our study delves into the Circular Economy as a pivotal strategy for fostering sustainability, offering an exhaustive, data-backed analysis of its effects on economic performance and environmental health in Romania. In light of our findings, we strongly recommend that future policy development in Romania should be aligned with the National Strategy for the Circular Economy. This would facilitate a more effective transition to sustainable practices, not only enhancing economic indicators but also reducing environmental impact.