Our objective is to conduct simulations with economic environmental model. We list the important and causal relationships among the levels and trace the feedback loop structures. In describing an economic and environmental model we focus on the relations among income, consumption, emission, and damage. This paper yields insight into maximization of welfare. Next, we present the simulation runs of the model, conducted with the help of existing system dynamics modeling tools.
System Dynamics (SD) is a special type of simulation modeling where
output validity refers to validating the patterns of dynamic behaviors, such
as oscillations, growth or decline. The developers and users of these
models (the decision makers and people affected by decisions based on
such models) are all rightly concerned with whether a model and its
results are valid. Structural model validity and validation have long been
recognized as one of the main issues in system dynamics. This concern
is addressed through pattern recognition and testing in this paper.
Another issue in dynamic simulation methodology is parameter
calibration; assuming that the structure of simulation model constructed
by the user is valid. Parameter calibration is the minimization of an error
function which is a measure of the correspondence between numerically
calculated output patterns and the respective real behavior patterns. We
offer a software that does automated parameter calibration with respect to
a given (desired) dynamic pattern. This particular feature can also be
used in policy improvement design.
Natural gas for automotive purposes is an appealing alternative: curbing local and global pollution and dependence on foreign oil are among the most remarkable advantages. The other side of the coin implies building and maintaining an on purpose network entailing financial requirements. The final aim of this work is to compare its advantages with economic rationale.
A system dynamics model is built and taken as reference for all quantitative assertions. It contains data referring to two scenarios: business as usual versus expansion. The model treats separately global and local emissions and infrastructure needs. Quantitative results are the basis for the final assessment, that is grounded on the externalities theory. By analyzing the scenarios gap numerous remarks follow.
Regarding global emissions, beneficial effects seem modest. Local emissions would either decrease or not vary depending on the pollutant. Avoided externalities estimates exceed infrastructure financial requirements. Natural gas is a suitable answer in tackling some issues related to the road transport industry.
The Norwegian Armed Forces used to have a unitary personnel policy. All officers were recruited with prospects of life-long employment. The long time constants in such a system meant that a transformation into a younger corps was almost impossible to achieve. The model-supported intervention significantly reduced the probable risk of failure in policy design and implementation. A number of achievements must be attributed to the model intervention per se. First, the models base case projected a 100% surplus of senior officers. This was an eye-opener. Moreover, the lack of suitable options within the current policy regime became obvious. Finally, the suitability of the new policy was convincingly presented and its implementation success virtually secured. The success of the model intervention is discussed. Though the most aggregated model sufficed analytically, the existence of a more detailed model that reflected the production system, crucially enhanced the analysis face validity, especially as a cost analysis was called for. However, more critical than the models transparency was that the results fell within the comfort zone of most key stakeholders. The results challenged intuitions enough so that the model was considered invaluable, but not so much so as to question the approach.
The Military Roundtable is the arena for sharing ideas and experiences
on the application of System Dynamics to military problems. The list of
topics includes, for example: strategy development; force-on-force
analysis; war-gaming; military decision making; training of military
decision makers; including command-post exercises; preparedness studies;
human resource management; development and management of military
capability; management of materiel acquisition; military logistics
modelling; in-service management. We suggest the following main topic
for this year's meeting: "SDM as a tool to support training and
exercise". Opportunities exist for participants to provide update on
recent research and consulting activities, to discuss opportunities for
the future and challenges that confront those working in or having an
interest in system dynamics modelling (SDM) in military context. We will
continue the work on assembling a compendium of models and readings on
SDM in defence.
In this poster, authors explain a System Dynamics model developed for measuring efficiency of the Small Aircraft Transportation System (SATS) that NASA has been developing to enhance intercity travelers' mobility in the country. The model is comprehensive in the sense that it includes multi-modes such as automobile, commercial airlines and rail. It also considers different types of decision makers such as travelers, airlines, Federal Aviation Administration (FAA) and Federal Rail Administration (FRA) that dynamically interact with each other based on its own interest. The model allows users to change several critical but uncertain parameters such as the price for SATS trip, airports for SATS operations, etc. This feature enables users to do "what-if" type of study. Technically, the model is developed as a stand-alone tool with a Graphical User Interface that encloses all computational procedures written in MALTALB. Socio-economic data and computational results are represented at a county level using the Geographical Information System (GIS).
The automotive industry is considered as one of the main drivers of todays global economy. The industry spans across the globe, with nearly each country trying to develop the industry and its supply chain within its boundaries. This paper presents a Business Dynamics model that maps the Egyptian Automotive industry, which started as a public industry and then transformed to a market driven private industry. The Egyptian automotive industry focuses on the local Egyptian market, with no current plan for exporting to the global market. Such focus provides the Egyptian automotive industries with challenges that impede its growth. The Business Dynamics model presented in the paper presents an explanation of the current status of the Egyptian Automotive industry. The model is then used to provide insights for the current status of the industry, as well as testing several policy options for stimulating the industrys growth.
Modelling of technology adoption has tended to be based on individual product diffusion, although traditional models have been extended to incorporate replacement, competition, generations of substitution and other managerial variables such as pricing. A question is: how can these models be broadened to represent service industry applications and generalised or upscaled to model the phenomenon of General Purpose Technologies? GPTs have the properties of pervasiveness and complementary technologies. GPTs suffer from long development delays or start-up problems involving the co-ordination problems of complementary bandwagon behaviour. System dynamics modelling is proposed as an effective industry-level modelling approach to link standard expert judgement market forecasting used in industry and theoretical analysis used by economists in order to provide robust technology management policies. This paper represents an overview of the work-in-progress research themes and a modelling agenda.
An Adaptive Expectations Approach to the Mechanisms of Transmission Model of the Central Bank of Colombia
Fernando Arenas Pontificia Universidad Javeriana
Franz Hamann Banco de la República
ABSTRACT
Looking for the potential applications of system dynamics in macroeconomic modeling at the Central Bank of Colombia, the Mechanisms of Transmission Model (MTM) was recast in a system dynamics model. The forward-looking function of the model that, in the case of the MTM is a rational expectations based function, was approached by means of the TREND function. This document describes the system dynamics model and shows comparative impulse-response results between the models, when PULSE and STEP shocks are applied to inflation target, monetary policy, food supply, nominal depreciation rate, and risk premium.
This paper examines results on a series of Cournot markets with groups of five seller subjects. Step by step, we add complexity (and realism) to the simplest market and test the effects on behavior in an accompanying laboratory experiment. Consistent with previous experiments and the rational expectations hypothesis, price behavior was explained with Cournot Nash equilibrium with biases towards competitive prices. When complexity is increased, there rationality is degraded and lead to a salient cyclical tendency. Indications of cyclical behavior were induced by the application of spectral analysis and autocorrelation. We found that the more problematic effect of complexity in market behavior is the extra delay rather than accumulations. We proposed a heuristic based on the bounded rationality theory, but the tests were not satisfactory.