Abstract
The circular economy (CE) was originally promoted as a framework capable of reconciling economic growth with environmental protection, but scholarship is now divided between techno-optimist perspectives that interpret CE as a pathway to green growth and degrowth approaches that regard it as inherently post-growth. This paper employs a first-principles conceptual approach to examine the macroeconomic mechanisms linking circularity and growth. By grounding the discussion in basic economic identities and material flow logic, it clarifies how reductions in throughput affect economic output and material stock across scales. The argument demonstrates that CE is contractionary in principle but stabilizing in practice: when implemented fully and globally, it constrains GDP through declining material flows, while partial and incremental adoption within existing institutions enhances efficiency, resilience, and welfare without systemic disruption. The divergence between techno-optimist and degrowth positions thus reflects differences in temporal and analytical framing rather than opposing evidence. Both positions also recognize that the current economic system is environmentally unsustainable. The limitations of the CE discussed in this paper suggest that it should be understood as a bridge paradigm that maintains short-term stability and highlights the need for continued research into economic models that extend beyond CE and its growth-based foundations.