Neoclassical economics seems to have rejected the concept of limits to growth by assuming that the market and the technological advances invoked by it will make it possible to tap new resources and create substitution of production factors, while it has outright excluded limitations invoked by the political, psychological and social institutions in its analysis. Classical economics, other the other hand, appears to have been cognizant of a multitude of limitations to growth, including demographic, environmental, and social. This paper reconstructs classical economic growth models using system dynamics method and demonstrates their behavior using computer simulation. A case is made for taking a pluralistic view of the growth process and reincorporating a multitude of institutions driving it into our models to arrive at realistic policy options.
This paper defines a hypothetical Law (HL) of capital accumulation that includes a growth rate of supply of labour force as a non-linear function of capital intensity. The main state variables are the labour productivity, relative wage, employment ratio, and capital-output ratio. An application of an extended Kalman filtering to the US macroeconomic data 19692002 exhibits long wave as a viable pattern generated by capital accumulation.
Applying the Structural Control Theory the present paper reveals closed loop control over a fractional growth rate of total profit and its advantages in comparison with an open loop control. The supposed control law of primary distribution of income for the macroeconomic oscillatory system is derived as a substantial modification of the initial HL.
It is shown that the US state and business leadership has been pursuing pro-growth stabilization policy with a focus on primary income distribution at least since 2001.
India is emerging as one of the biggest markets for offshore services. Business process outsourcing (BPO) is the delegation of one or more information technology (IT) intensive business processes to an external provider that, in turn, owns, administrates and manages the selected processes based upon defined and measurable performance metrics. Offshore outsourcing is an umbrella term covering a range of IT and business services delivered to companies in developed countries by personnel based in developing countries. Though Indian outsourcing industry is growing, the attrition rate is also rising in this sector. So is the backlash against outsourcing. In order to survive and grow in this scenario, Indian firms must ensure that their services are not only cost-effective but also qualitatively superior. The present study probes into these issues. The study aims to explore the structure of Indian outsourcing industry through the methodology of system dynamics. A system dynamics model has been developed, validated and simulated over time to understand the trends that characterize this industrial segment. The implications of the results of the study are discussed.
This paper is aimed at formalizing an objective method to analyze and assess operational risk in supply chains. The proposed approach consists of exploiting the analogy among logistic networks and dynamical systems; in particular, it proposes to identify the risky events characterizing a generic supply chain by studying its attributed Petri net and the corresponding coverability graph, whereas it suggests to assess the risky events effects by building the logistic network simulation model, experimenting on it and applying ANOVA to the experimental campaigns results. Finally, the method has been applied to a single-item, 3-stages supply chain to show how it can be practically used.
Firms need to act entrepreneurially to compete in today ultra-competitive business environment. This requires firms to actively search for and exploit opportunities to increase revenues or decrease costs in an uncertain environment. Within a firm, these activities are the functions of the entrepreneur or the entrepreneurial resources. In return for their services, these resources receive payments known as entrepreneurial rents. These rents are the result of subjective judgments and the activities that generate them are subject to imitation. Thus, entrepreneurial rents are both ex ante non-contractible and temporary. These characteristics make their measurement difficult for managers. This paper is an attempt to measure entrepreneurial rents using a system dynamics framework. System dynamics models are uniquely positioned to capture the dynamic complexities of these rents. In doing so, I present a SD model of a three-site hog production operation and compute the entrepreneurial rents generated from several arbitrage and innovation activities.
This paper focuses on the application of system dynamics in the integration of knowledge management (KM) and human resource management (HRM) with specific reference to the determination of the optimum setting of time-based policy parameters. The integration of KM and HRM is w.r.t. the engineering competence pool development and deployment. The feedback as well as feed-forward loops were used in the development of the control loops, which govern the simulation carried out in two distinct stages. In both the stages, the influence of the governing time-based policy parameters has been studied to investigate the critical parameters, which significantly influence the effectiveness of the system. The simulation results envisage the effect of the policy parameters, based on which implications are drawn for better policy evaluation and control. Even though the study has a national context, the procedure adopted in this research has the potential to be extended to the global level.
System dynamics concepts and methods are rarely referenced in the field of coastal resources management, even though coastal systems and decision-making are dynamically complex and the SD literature offers a rich and relevant body of theory, practice and models. Recent work in the theory of ecosystem management calls for the use of modeling and is becoming of increasing interest to coastal managers. A simple stock and flow model of coastal management is presented that is drawn from the legislative design of one of the oldest and certainly successful U.S. state programs, Rhode Islands Coastal Resources Management Program. This model exhibits several dynamic behaviors intuitively familiar to coastal managers. Model runs are presented using parameters taken from the Rhode Island case, including runs with and without the coastal management program in place. These results are compared with performance data from the 35 year Rhode Island coastal programs permit data base, and closely reproduce long term trends in key variables. The forward-looking scenarios are utilized to suggest approaches for the state program as it enters the new century. Implications for newly emerging coastal programs in developing countries are also drawn.
The growing reliance on technological infrastructures has made organizations increasingly vulnerable to threats from erstwhile trusted employees and clients. Recent research indicates that successful defense from these threats depends on both technical and behavioral solutions. In this paper, we report on our work to identify seemingly reasonable organizational actions that may inadvertently lead to increased risk exposure. We also consider how potential internal attackers may be encouraged or discouraged by monitoring the organizational responses to probes of the firms security systems.
Two interwoven work products are presented: A case study that presents a particular type of insider threat long-term fraud and a simulation model that supports the case, the underlying dynamic theory, and examination of policy options. The case and model combine to produce a motivating and useful exercise that illustrates the problems of insider cyber-threats. This material has been used in teaching of insider threat issues with satisfactory results.
The December 4th, 2004 issue of The Economist had a 3-page Special Report
entitled The future of the dollar which cites the following from the Roubini-Setser (R-S) paper ; if the real trade-weighted value of the dollar remains close to its average in 1990-2003 ( slightly above current levels ) and there is no change in domestic policy, Americas current-account deficit would rise to 8% of GDP in 2008 and its net debt would increase to over 50% of GDP. This projection came from one of three scenario simulations ( their Baseline scenario ) based on a model described in the R-S paper. The R-S papers model, when replicated in Vensim, contains one positive feedback loop to represent how interest on debt leads to exponential debt growth but excludes much of the of the papers rich mental models which imply much more endogenous model structure than that used in the papers scenario simulation model. This SD conference paper recreates the R-S scenario simulation model and then presents another version which tries to include more endogenous model structure based on the R-S papers own rich discussion and mental models.
Telecommunications in developing countries lack adequate planning and policies, so their telephone densities show the lowest values worldwide. The failure in considering the complexity of the regional telecommunication system in developing policies and technological strategies has increased the telecom gap between other regions and this particular sector of the world. We used a system dynamics modeling approach as a methodology that deals with the complexity of the system in order to evaluate existing value added services and access technologies in telecommunications that could accelerate the dispersion of regional telephone services in developing countries. The role of wireless systems, which have a low deployment delay, was found to be crucial in the growth of urban and rural telecom infrastructure in developing countries. The value added services were found to have a positive impact by increasing the financial resources of the telecom company and the number of urban telephone lines.