The model in this paper is, therefore, directed towards an understanding of the mechanisms at work during the UK business cycle. Its time horizon is no greater than ten years, with the main emphasis on the next five. It is frequently argued that cycles of longer period than the business cycle exist, e.g. the 50 year long wave. It is not intended that this model should try to capture in detail the mechanisms believed to produce them. However, their role in determining the underlying trend must be recognized, and their effects incorporated exogenously, perhaps by reference “off-line” to other models designed to look at these more distant horizons.
Since 1972, Jay Forrester and colleagues at MIT have been evolving the System Dynamics National Model (SDNM). The purpose of this model is to guide policy makers in dealing with today’s major problems. The ambitious scope of the project motivates careful examination of modeling practices and how they contribute to the success of the project. The above paper recounts incidents in the development of the SDNM and discusses the related modeling issues.
The purpose of this paper is to introduce an integrated framework for long-range strategic planning to a railroad. The framework is a computer simulation model designed to be useful to most freight –hauling railroads. The model can help to increase the understanding of problems facing the railroad and to aid in developing strategies for addressing these problems. It is designed to forecast railroad performance and to aid in developing more effective policies for railroad management. It can also be used by Federal agencies to evaluate impacts policy on railroad performance.
To improve matters in the behavioral sciences, system dynamics can play the role of catalyst by providing both the holistic view which is needed to understand the behavior of human beings and not just bits and pieces of their actions and the necessary technical tools to map behavior over into manageable models. In return, system dynamicists will learn how to include a more differentiated and thus more realistic representation of human behavior in their models of social systems.
It was the purpose of this study to describe a modest theory of educational change which could be stated with some precision, which could reproduce observed historical behaviors, which could facilitate an understanding of the structural dynamics giving rise to those behaviors, and which would permit the examination of selected policies which have some historical currency.
The Causal Loop Diagram, a signed diagraph which shows the variables and interactions of a system Dynamic model, has been studied. It has been found convenient to start with the levels and their interactions. Then signed interactions between levels and rates may proceed. The transformation from signed level diagraph into Causal Loops, in terms of levels and rated, is presented. Dynamics properties such as stability, oscillations, controllability, and observability are related to the information contained in the Causal Loop Diagram. These dynamics properties have been found very useful in the synthesis of policies aimed to manipulate structure. Illustrations and examples are inserted in the exposition.
The aggregate demand-aggregate supply (AD-AS) model presented in most intermediate and advanced macroeconomic texts may provide misleading insights into the effects of economic stabilization policies. Conventional analysis of the AD-AS model shows that policies which raise demand during periods of peak unemployment and reduce demand during periods of low unemployment tend to stabilize the economy. This paper: (1) Develops a dynamic model of the AD-AS model; (2) Shows that the model produces a very long period of oscillation (approximately 50 years); (3) Shows that the conventional stabilization policies increase damping of the long cycle; (4) Adds inventories to the base model; (5) Shows that the inventories introduce a business cycle fluctuation to model behavior; (6) Shows that the conventional stabilization policies destabilize the business cycle behavior mode. This paper should help explain why standard “stabilization” policies tend to destabilize the business cycle in the System Dynamics National Model.
The paper is organized in three parts. It begins with a brief review of the substantive exchange of views in the case, including the Company’s position, the Attorney General’s position, and the analyses and counter analyses presented in support of these positions. In Part Two, the paper describes the participants and the schedule of the hearings. It is argued that the rapid pace of these hearings and the background of the participants are important determinants of usefulness of System Dynamics models under adversary proceedings. The third part of the paper concludes with a discussion of the advantages and disadvantages of system dynamics under fast paced, adversary conditions.
This paper describes a System Dynamics model of the foreign trade sector in a small open economy. The model is used to investigate the consequences of various economic policies aimed at solving problems which a high-cost country may experience when its debt-ratio begins to increase. With the model, we simulate some of the economic consequences of currency devaluation, tax increase, restrictive public policy and income freeze. Each of these measures significantly improve the debt-ratio, but only after a delay of 5-8 years, as a result of various bottlenecks in the decision-making process.
After twenty-five years of development and some notable achievements the field of System Dynamics is not as large, well-known, respected and influential as it should be based on the breadth and power of its principles and the need of industry and society for dynamic analysis of this kind. It is suggested that System Dynamics’ methods be used to analyze the growth of the field and improve its development. This paper initiates the self-analysis by presenting a review of performance and preliminary model structure for the field to encourage constructive criticism and to facilitate understanding and cooperative revitalization. The model structure may be general enough to apply to other fields as well.