The housing market is heavily dependent on two main factors; supply and demand. Both play a major role in determining an equilibrium price for both sellers and buyers in the real estate market.
Residents, or the general population of individuals, place significant reliance on financial institutions to provide sources of capital i.e mortgages, to fund their purchases of homes. The rate of interest charged by these organisations in turn gives buyers (consumers) purchasing power, creating demand.
Supply is made up of the number of houses in the market, and consequently, of these, the number of houses which are up for sale. As the prices of houses for sale increases, the demand for purchase of these properties decreases. Conversely, the lower price, the higher the demand. Once the market reaches an equilibrium point, to which buyers and sellers form an agreement, houses are sold accordingly. An underlying factor to consider is the cost of construction, which impacts producers, or suppliers in this instance, and thus the number of homes for sale, and the expected profit sellers hope to achieve.
The simulated graph highlights the common scenario within the housing market, to which we see that as price increases, the total number for houses for sale decreases, generating an opposite slope to the price. As the price for houses increases, the demand for the houses decreases and vice versa. The equilibrium is evident at time 14 whereby the price of houses and the number of houses for sale overlaps which in turn creates a market to which both buyers and sellers are happy.
Simple model of the global economy, the global carbon cycle, and planetary energy balance.
The planetary energy balance model is a two-box model, with shallow and deep ocean heat reservoirs. The carbon cycle model is a 4-box model, with the atmosphere, shallow ocean, deep ocean, and terrestrial carbon.
The economic model is based on the Kaya identity, which decomposes CO2 emissions into population, GDP/capita, energy intensity of GDP, and carbon intensity of energy. It allows for temperature-related climate damages to both GDP and the growth rate of GDP.
This model was originally created by Bob Kopp (Rutgers University) in support of the SESYNC Climate Learning Project.
This model also shows the operation of a simple economy. It differs from Model 1 primarily in the representation of all goods in the economy by units of measure of a higher level of abstraction. Thus, the same model can represent economies at different levels.
The simulation demonstrates how differing rates of consumption affect Savings.
This model is based on the article Dynamic modeling of Infectious Diseases, An application to Economic Evaluation of Influenza Vaccination Farmacoeconomics 2008, 26(1): 45-56 .
WIP of several books of Karl Polanyi's thoughts and papers around social science economic history and capitalism. . See also Summary of the Great Transformation IM-10640
WIP SD REpresentation of Steve Keen's BOMD Minsky model (described in Fig.5 of his patreon Jan2021 Draft New Economics Manifesto) to hope to make the causal structure clearer
In a recent report, the World Economic Forum
considered that the use of robots in economic activity will cause far more job
losses in the near future than there will be new ones created. Every economic
sector will be affected. The CLD tries to illustrate the dynamic effects of
replacing human workers with robots. This dynamic indicates that if there is no replacement of
the income forgone by the laid off
workers, then the economy will soon grind to a halt. To avoid disaster, there
must be enough money in circulation, not parked in off-shore investments, to
permit the purchase of all the goods and services produced by robots. The
challenge for the government is to make sure that this is case.
Economic growth cannot go on forever, although politicians and most economist
seem to think so. The activity involved in economic growth necessarily generates entropy (disorder and environmental degradation). Entorpy in turn generates powerful negative feedback loops which will, as
a response from nature, ensure that economic activity will eventually grind to
a complete halt. In these circumstances organised
society cannot persist and will collapse. The negative
feedback loops shown in this graph have already started to operate. The longer economic growth continues unabated, the more powerful these negative feedback loops will become. How long
can economic growth continue before it is overwhelmed? It may not be very far in the future.
This model shows the structure and operation of a simple economy. It can represent economic systems at different levels of abstraction (e.g. a single good, a group of goods, multiple groups, & an "economy.")
This model has one significant difference from Model 4. The fractional consumption rate table serves the purpose of demonstrating the effects of changes in the fractional consumption rate (or the converse the fractional rate of saving) from 100% to less-than 100% to more-than 100%.
It demonstrates dramatically the effects of significant changes in consumption rates.
WIP Overview model structures of Khalid Saeed's 2014 WPI paper Jay
Forrester’s Disruptive Models of Economic Behavior See also General SD and Macroeconomics CLDs IM-168865
ECONOMIC GROWTH feeds on itself, provided the growth engine is fed with materials and
finance. In this highly simplified representation some of the factors that influence economic growth
are show in the incircled green fields. Governments can influence economic growth positively
via investments and payouts. The most
obvious tool which governments can use to slow an overheated economy is
taxation.
This high-level
simulation model presented by Jay Forrester in his book World Dynamics, simulates
socio-economic-environmental world system. The world Model was created in a
time where pollution and other negative effects of industrialization and
economic growth started to become recognized in 1970. For this exam purpose, we have
rebuilt the model to do some experiments and analyze the results.
