Goodwin cycle IM-2010 with debt and taxes added, modified from Steve Keen's illustration of Hyman Minsky's Financial Instability Hypothesis "stability begets instability". This can be extended by adding the Ponzi effect of borrowing for speculative investment.
Motesharrei, S.; Rivas, J.; Kalnay, E. "Human and nature dynamics (HANDY): Modelling inequality and use of resources in the collapse or sustainability of societies". Ecological Economics 101 (2014) 90-102
This is Figure 6 from Lancastle, N. (2012) 'Circuit Theory Extended: The Role of Speculation in Crises' based on Keen, S. (2010). Solving the Paradox of Monetary Profits.
Capitalism is in crisis and climate
change disruption is now beginning to hit the bottom line. Insurance companies
know this well. According to a report by the Bank of England, insured losses
have risen from $10 000 million in 1985 to $50 000 million in 2015. Climate change
cannot be reversed, and extreme weather events
will undoubtedly get worse in the future strengthening the disruptive effects
shown in the CLD. Another dynamic is that
companies will continue to automate and, as The Economic Policy Institute has shown,
fail to reflect productivity gains in workers' salaries. The result, stagnating
salaries is disastrous for demand, given that capitalism needs endlessly rising demand
and consumption. A further serious problem is that as climate change gets worse
there will be increasing demands for companies to assume their responsibility and
bear the costs of negative externalities. The CLD shows these factors which are likely
to lead to the collapse of the system: when capitalism can no longer generate 'capital'
it has stopped to serves any useful purpose.
Este modelo es una copia de "Goodwin Business Cycle". Quité al menos una variable y aproximé la relación discreta entre el nivel de empleo y el crecimiento anual del salario con una función basada en la tangente hiperbólica.
From Walrave ISDC2014 paper Counteracting the success trap in publically owned corporations. Similar to the ordinary (efficiency focussed) and dynamic capabilities (explore) insight described by David Teece
Regulation of resource allocation to service in response to service quality. A non-price-mediated resource allocation system. From Sterman JD Business Dynamics p172 Fig 5-27
This model illustrates the current practice and consequences of government spending. Following the
direction of the arrows from right to left the model shows the following sequence
based on current practice:
Government
Spending at a certain point leads to spending in excess of tax receipts. This
will automatically lead to the issue of treasuries in the belief that the excess
spending must be financed by borrowing (although the government has the capacity
to create money). This in turn will
increase the national debt.
Consequences that follow from this practice:
1) That national
debt increases whenever the government spends in excess of tax receipts.
2) That the
government must pay interest on the debt issued, which in turn increases and
reinforces the need for government spending.
3) That the
interest paid on treasuries will increase private sector income.
There is an
alternative view, supported by Modern Monetary Theory, of how government spending
can proceed. Please see this Insight:
