Circular investments as a key to solving the growth dilemma

The rationale for this study is based on the extreme importance of finding a solution to a complex growth dilemma arising from the negative effects of human activity and the limited ability of the ecosystem to regenerate and provide resources required by mankind to ensure sustainable development and the long-term prosperity. The research is aimed at proving a scientific hypothesis that states: when the global raw-materials crisis becomes increasingly noticeable in various countries of the world, including Russia, circular investments may become a driver for long-term economic growth and the launch of far-reaching reforms of the economy in the 21st century. Circular investments in this paper are viewed as a special type of real eco-investment that combines advancements in technology and innovations to ensure renewal and industrial-scale reproduction of resources (raw materials and energy) from industrial and household waste, along with the mitigation and/or elimination of negative effects, on the environment. A multiple linear regression model has been developed to confirm a statistically-relevant connection between circular investments and real GDP. As a methodological foundation for the model, we used the classic Cobb-Douglas production function modified to take into account industrially reproduced raw material resources included in the production process. Further, we have defined major limits for circular investments in Russia today and highlighted the primary measures which are to be taken to launch circular investments in order to find a solution to the complex growth dilemma.