Microeconomic measures can produce counterintuitive 'emergent' effects at the macro or systemic level. The commendable act of saving money by individuals during uncertain economic times has the perverse macroeconomic effect of making a recession  worse: in aggregate there will be less money available for spending, suppressing demand for goods and services. Economists call this effect 'the paradox of thrift'. Similarly, logical efforts by companies in such conditions to reduce their wage bill or their postponement of investment decisions will reduce spending in the economy  and deepen the economic downturn.

What can be done to counteract this harmful dynamic? The missing spending can be replaced by government spending: governments have it within their power to effectively counter economic downturns!

Circular equations WIP for Runy.

Ocean/atmosphere/biosphere model tuned for interactive economics-based simulations from Y2k on.

Barangay IRAWAN Systems Model

Unfolding story based on Bogdanov's original A Short Course of Economic Science text and Pilyugina's 2019 article

The causal loops are presented to transfer values from Economic values in Capitalism to Community values in the new economy

Overview of Part F Ch 25 and 26 of Mitchell Wray and Watts Textbook see IM-164967 for book overview

This Insight Maker model illustrates the complex relationships involved in the destruction of rainforests. The reinforcing loop emphasizes the destructive cycle where economic development leads to increased deforestation, while the balancing loop highlights the negative consequences on biodiversity, climate, and economic activities, attempting to counteract the destructive forces. The model serves as a simplified representation to better understand the interconnected factors contributing to rainforest destruction and the importance of considering feedback loops in addressing environmental issues.

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 demonstrate how the exisitng tested COVID cases effects economic recovery via goverment intervenes.

​Climate Sector Boundary Diagram By Guy Lakeman

Investigations into the relationships responsible for the success and failure of nations. This investigation was prompted after reading numerous references on the subject and perceiving that *Why Nations Fail: The Origins of Power, Prosperity, and Poverty* by Acemoglu and Robinson seem to make a great deal of sense.

Summary of Ch 27 of Mitchell Wray and Watts Textbook see IM-164967 for book overview See IM-169093 for added dynamic evolutionary economics history

Wealth can be seen as the factories, infrastructure, goods and services the population of a nation dispose of. According to Tim Garrett,  a scientist who looks at the economy from the perspective of physics, it is existing wealth that generates economic activity and growth. This growth demands the use of energy as no activity can take place without its use. He also points out that the use of this energy unavoidably  leads to concentrations of CO2 in the atmosphere.  All this, Tim Garrett says,  follows from the second law of thermodynamics.  If wealth decreases then so does economic activity and growth. The CLD tries to illustrate how wealth, ironically, now generates the conditions and feedback loops  that  may cause it to decline. The consequences are  inevitably economic  stagnation (or secular recession?). 

You can read about the connection Tim Garrett makes between 'Wealth, Economic Growth, Energy and CO2  Emissions' simply by Googling 'Tim Garrett and Economy'.

This simple model is derived from  D.H. Meadows, Thinking in Systems chapter 2, figures 27 and 28.  It is designed to explain and demonstrate how the economic system is driven by both an amplifying feedback loop (shown in blue) and a stabilizing feedback loop (shown in red).

Explanation of the Model

Ocean/atmosphere/biosphere model tuned for interactive economics-based simulations from Y2k on.

Simpler view IM-70351 combined with Economic ViewIM-69774 in preparation for integrating with Prevention Investment Framework (private) IM

Assignment Four - Big Data & Marketing Analytics MKT563

Student No : 94040609

Trish Anderson

The Maranguka Justice Reinvestment (JR) project is a community led program that demonstrates how the redirection of government funding into community programs can address underlying issues which lead to crime in the community (KPMG, 2018). This interactive model shows how the redirection of funding from the Justice System into Community Programs improves the rate of year 12 graduates, reduces the number of incidents of domestic violence whilst reducing the number of days spent in custody. This model also shows how investment in Community Programs leads to positive economic impacts for the Community as well as cost savings for the Justice System over time.

 

One of the key findings of the Maranguka JP project found that redirecting funding from the Justice system into the Community has multiple benefits. This model begins with NSW government funding on a scale from 0 to 1000 which can be adjusted using the sliders based on available funding, sliding the scale to the right increases the available funding. The % Community Funding and % Justice System Funding variables can then be adjusted in the sliders to determine how much of the funding goes to the community as a percentage and how much of the available funding gets allocated to the justice system.  

 

Investment into Community Programs is made available by the investments into the Bourke community.  Community Leaders in the Bourke Community develop programs and each program has shown to have a positive impact on the number of students graduating year 12 in the community, the number of domestic violence incidents and the number of days spent in custody.

 

Variables

The current number of Year 12 graduates, the current number of domestic violence incidents and the current number of days in Custody are input into the sliders on the hand panel and the model simulation will show how these figures are impacted through investment in the community over time. These variables also contribute to the growth of Youth Development, Family Strength and Adult Empowerment in the community. These factors result in reinvestment opportunities, which have positive economic impacts on the community. Savings are also passed back to the justice system as underlying issues in the community are addressed over time.

 

The slider scale on the right hand panel uses six adjustable variables to model how the rate of investment in the community can impact the rate of positive impacts in the community and the rate of reinvestment opportunities that can be achieved. Running the simulation will show the larger the % of Community Funding, the faster the results can be seen over time and the greater the economic impact and justice system savings will be. The smaller the % Community Funding will show how impacts are still positive but occur over a longer period of time.

 

% Community Funding and % Justice System are a percentage of funding whereas NSW Government Funding is represented in dollars ($). NSW Government Funding is on a scale from 0 to 1000 but the assumed scale is $000’s, where 1,000 equals $1,000,000.

 

 

Parameter Settings

With community funding, the amount of Year 12 graduates increases by 31% (KPMG, 2018)

With community funding, the number of Domestic Violence incidents decreases by 23% (KPMG, 2018) (KPMG, 2018)

With community funding, the number of days spent in custody decreases by 42% KPMG, 2018)

Reinvestment opportunities contribute to 1/3 of economic impacts back the community where 2/3 of the reinvestment opportunities contribute to savings within the Justice System KPMG, 2018).

 

Assumptions

The rate of impact on year 12 graduating students, Domestic Violence Incidents and Days spent in custody changes at the same rate of % Community Funding available to the community.

 

References

 

Backing Bourke: How a radical new approach is saving young people from a life of crime. (Thompson, G). abc.net.au.

KPMG. (2018). Maranguka Justice Reinvestment Project Impact Assessment. Retrieved from https://www.justreinvest.org.au/wp-content/uploads/2018/11/Maranguka-Justice-Reinvestment-Project-KPMG-Impact-Assessment-FINAL-REPORT.pdf