This is a second paper of a series of macroeconomic modeling
that tries to model macroeconomic dynamics such as the determination of GDP (Gross
Domestic Product) and money supply from system dynamics perspective.
Following the first paper on the money supply and creation of deposits,
this second paper tries to model dynamic determination processes of
GDP, interest rate and price level on the same basis of the principle of
accounting system dynamics developed by the author.
For this purpose, a simple Keynesian multiplier model is constructed
as a base model to examine a dynamic determination process of GDP.
It is then expanded to incorporate the interest rate, whose
introduction enables the analysis of aggregate demand equilibria
as well as transactions of savings and deposits, and
government debt and securities.
Finally, a flexible price is introduced to adjust an interplay between
aggregate demand equilibrium and full capacity output level.
A somewhat surprise result of business cycle is observed from
the analysis.
This paper develops a hypothesis that the normal mode of operation for many organisations is well beyond their safe design capacity and that many health and social care organisations in the UK are in this position. This situation arises from having to cope with demand, irrespective of their supply capability.
The irony is that such organisations can appear to cope at the strategic level. This is because operational managers employ a variety of well-intended, informal, survival techniques to meet performance targets. However, such practices can perpetually mask the underlying reality and have serious unintended consequences .
Evidence for the hypothesis has emerged from a number of studies carried out using system dynamics to identify and promote systemic practice in local health communities in the UK. The rigour of quantitative simulation model construction has identified mismatches between how managers claim their organisations work and the observed data and behaviour. The discrepancies can only be explained by surfacing informal coping strategies. Indeed, the data itself becomes questionable as it reflects more the actions of managers than the true characteristics of patient pathways.
If proved wholly or even partially correct there are some important messages in the paper for Health and Social Care management, the meaning of data and for modelling.
Real-world policy analyses efforts indicate repeated behavioral patterns that inhibit systems approaches, such as the time and budget pressures, the trade-off of detail vs. high-level insights, and the tendency to dwell in the familiar rather than delve into the unrevealed. Examining mainstream (non System Dynamic) business and policy processes issues such as these seems critical to increasing the introduction of systems approaches. However, the perspective we as a community of modelers takes is critical to reinventing business and policy analyses. To the extent the barriers are seen as circumstances of the modeling environments there is little leverage towards resolution; if we can see the impediments as being a result of our behavior as analysts, the nature of the barriers change and there is much more opportunity for improvement. The paper examines a nonSystem Dynamics policy analysis for the electric utility industry from both these points of view.
The two most important fundamental needs of towns and cities are a sufficient supply of adequate drinking water and the removal of polluted water. History has shown that if these needs cannot be met, cities rapidly become uninhabitable. New Zealand's current water systems were designed and built in the 19th century and have not been improved much since. Generally, infrastructure has been built on the assumptions of abundant water resources and the unlimited ability to treat and dispose of polluted waters. Especially in Auckland, New Zealand's largest city and one of the most rapidly urbanising cities in the world, there is increasing tension due to rapid urban growth and the costs associated with replacing old water infrastructure and extending it to new urbanised areas. The challenges of managing urban water systems in New Zealand today call for an application of system dynamics. Our proposed research is based on the hypothesis that systems thinking and modelling methodology can be applied to the question of urban development in the Auckland region and is a valid instrument to identify policies that effectively foster the sustainable development of urban structures, in particular urban water infrastructure. This paper discusses the current situation and challenges, and outlines the proposed research.
The objective of this workshop is to provide participants an introduction to agent-based modeling of
crowd dynamics. A summary of pedestrian socio-psychological egress behavior will be presented
together with an outline of existing modeling techniques and software tools. A detailed description of a
simple crowd model that can be implemented using MATLAB will be presented. Participants will learn
how to develop a simple yet fully functional simulation and visualization of crowd dynamics. Skeleton
Matlab scripts will be available for download from www.sanithw.org starting July 1st, 2005 but will also
be available via PC/MAC compatible USB drives during the workshop.
In a constantly changing environment, a Computer Security Incident Response Team (CSIRT) has to evolve over time in order to sustain or improve its effectiveness. The main task of a CSIRT is to help victims mitigate the effects of computer security incidents. A frequently identified problem for a CSIRT is that they are overworked, understaffed and under funded. In this paper, we present a conceptual model of such conditions based on a case study. The model is a first attempt to understand the main factors influencing a CSIRTs ability to handle computer security incidents effectively, and to identify ways to improve their overall effectiveness. Based on theory from process improvement and information from the case study, we have identified that short-term pressure from a growing incident workload prevents any attempts for developing more response capability long-term. Fundamental solutions to solve this problem will typically involve a worse-before-better trade-off for management.
Information revolutions change the world by taping into a positive feedback loop. If we can identify the loops we can understand where they might be going and what their limits might be. We need to know the difference between a short-term trend and a long term dynamic. We need to know where this information might be pushing us so we can know if it is where we want to go.
Trying to look at a category, as broad as information revolutions, to identify patterns requires an approach that will give a broad but well specified picture a way to understand the positive feedback loops that create the growth and also to understand the countervailing loops that come into play in various ways. I believe that causal loop diagrams can give us a clearer picture of this kind of broad, messy problem
This paper describes transform approaches to control Vendor-Managed Inventory (VMI). The effect of different modelling techniques and their significance is examined. Modelling was achieved with the Simulink package using the equations developed by Disney and Towill for a VMI system model. Analysis of several types of delay representation were compared to illustrate how the results depend on their formulation. The effect of using a discrete model is to deepen the stock-out and increase the required order rate. Analysis of the stability of the different models are discussed and evaluated. It is shown that the continuous model with an exponential delay is always stable and with a fixed delay can be made stable. The requirement for the system is also computed for a discrete model with exponential delay. Reduced inventory stock-out and a smaller WIP peak are achieved with different order smoothing function. This has special significance for e-manufacture.
An interactive learning environment (ILE) appropriate for intermediate macroeconomics students has
been simplified for students in introductory college and high school courses. Without changing the
underlying model or the simulation options, the simplified instructional approach relies on feedback
loop diagramming more than stock-and-flow diagramming. Interactive Vensim causal loop diagrams
are embedded in a STELLA interface, using slide show and video software. In addition, students appear
to learn more as model-users if they engage in preliminary model-building activities using simple
word-and-arrow diagrams.
Diffusion models of radical technologies are often based on an epidemic structure developed on the Bass principles of generic external and internal communications. However, in most cases such processes involve more complex communication and decision mechanisms. The diffusion processes should account for interdependences with other innovations and also the substitution mechanisms with regard to the technology in place. Substitution must be understood with a much broader scope than the analytical view of the Fisher and Pry model. As many diffusion authors have acknowledged (but partially excluded from their models), diffusion is a social process with innovation moving through interpersonal networks. We propose a model that accounts for the dynamics of social factors in technological substitution. Based on the System Dynamics methodology, our model disaggregates most of the communication structure and individuals characteristics that are implicitly embedded in traditional diffusion models. Our discussion starts with the characteristics of radical technological innovations. We then proceed with the theoretical basis of our social aggregation approach by presenting Kellys personal constructs system theory, outlines of social psychology, decision making under uncertainty, and the interdependences between innovations characteristics and human behavior. We also make an attempt at considering both sides (consumers adoption / competitors imitation) of a substitutive diffusion. Brice Dattée's research is funded by the National Institute of Technology Management in Ireland.