When people talk about a government deficit, they forget
that this is only one side of the ledger. On the other is a corresponding non-government
SURPLUS. The money the government spends is not lost but shows up in the private
sector as income. When one talks only of the deficit then one can understand that
many think it should be reduced or even converted into a surplus, but reducing
the government deficit reduces private sector income and a government surplus
forces a deficit on the private sector with a potentially devastating
effect on private sector wealth and economic activity. Unless the economy is overheating, government
deficits are usually healthy. For countries that run traditionally a trade deficit,
such as the US they are necessary to maintain economic activity. Consider this
fact: for almost all of past 40 years the US and the UK have run deficits without
any harmful effects!
This video by professor Stephanie Kelton contains evidence that supports the modle.
https://www.youtube.com/watch?v=g6rlprwQB5E
The Dynamic that shows that Government Deficits benefit the Private Sector
Commercial aviation economic activity in the EU
This is to support a discussion on money flows and growth. Money as a lubricant for the flow of embodied energy in human systems.
See also A Prosperous Way Down website
Odum Money and Energy Flows
Graph representation of Ch3 of their 2007 Monetary Economics book, based on Alvarez and Ehnts 2015 paper The roads not taken. Also see more complex WIP to successively split sectors at IM-185550 . See also essence of MMT IM for simpler intro
Godley and Lavoie Simple Growth Model
• This model examines how sustainable consumerism is from social, economic, and environmental aspects. The question in focus is "
How will our second-hand clothing donations affect communities in developing countries, specifically Kenya?"
5 Stock Variables:
• U.S. Consumers
• Multinational Corporations
• Overseas Factories
• Kenya
Highlight Findings:
To sum up, there are 4 major problems associated to donations:
• 1.
Source of problem is the consumer: Cheap deals attract hundreds of millions in revenue for fast fashion, and contribute to 100,000 tonnes of clothing to Kenya annually.
• 2. Rapid consumerism leads to over-utilization of slowly-renewable resources, such as water.
• 3. Nearly 96% of textiles jobs are eradicated by the massive inflow of clothing donations to Kenya.
• 4. The offshoring of textiles jobs enrages U.S. blue-collar workers, leading to the rise of protectionism.
Environmental, social, and economic sustainability aspects of textiles donations
This model was proposed in a regulatory framework in Brazil. Its main idea is the obtainment of a dynamic control model to avoid the related parties issues on regulated public services over contract extensions. As the terminal condition of these contract extensions is NPV=0, the firms would have an incentive to contract related parties to inflate costs, and diminish their profits, in order to request a larger time extension. So, this system creates a stable "shadow" based on the 5 years before these extensions, where the company did not have such incentives.
Cost Efficiency Capture Model
Overview of Part E Ch 20 to 24 of Mitchell Wray and Watts Textbook see IM-164967 for book overview
Economic policy in an open economy
Ocean/atmosphere/biosphere model tuned for interactive economics-based simulations from Y2k on.
Final Project - Q2
WIP of Rammelt's 2019 System Dynamics Review Article which has STELLA and Minsky software versions as supplements. Compare with the older IM-2011 version
Simplified Keen Goodwin Minsky Financial Instability model
Adapted from Fig 12.1 p.476 of the Book James A. Forte ( 2007), Human Behavior and The Social Environment: Models, Metaphors and Maps for Applying Theoretical Perspectives to Practice; Thomson Brooks/Cole Belmont ISBN 0-495-00659-9
Economic Theory Map
I made this as an illustration of a piece of text I read in Regenerative Economics, household economics.
Unpaid Care
first draft with forked supply demand example intact
Backup of Associative Economics - The Farmer, The baker and The Bread Eaters
A simple budget planning system. What additional complexities can you add?
ISD Savings Plan
An initial study of the economics of single use coffee pods.
TENESPRESSO
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.
Original model done for The Perspectives Project though recast into Kumu.
Why Nations Fail
Book Summary of The Great Transformation by Karl Polanyi see Wikipedia . See also more Karl Polanyi ideas IM-181325
The Great Transformation
Map of Geoffrey M Hodgson's 2015 Conceptualizing Capitalism book summary pdf with other ideologies added sept 2021 from new politics website
Capitalism and Ideologies
Adam Smith's The Invisible Hand: The Feedback Structure of Markets. From Sterman JD Business Dynamics p170 Fig 5-26. A price-mediated resource allocation system..
Price control mechanism
I have tried to capture the unemployment benefits budget in a causal loop diagram. You can make this as extensive as you want, but I have tried to focus on how unemployment benefits are financed and on the main determinants of expenditures and income. I was not (yet) able to 'close te loop' - to build the diagram up from feedback cycles.
The diagram is in Dutch.
Causal loop diagram of unemployment benefits
This Insight is used for simulating growth of a company with specified parameters.
CompanyGrowth
During the 'big recession' many governments have
deliberately repressed salaries, usually via structural reforms, in order to
gain competitivity. However, repression of salaries increases inequality,
social discontent and often has counterintuitive effects. Salaries are a cost
for companies, but they are also the basis for the demand for the goods and services
they offer: people with little income cannot afford them. Scientific studies
have shown repeatedly that economic growth generated via salary increases does
not endanger the creation of employment, but rather reinforces
it. In most countries, the 'positive effect of salary increases' eclipses any
possible negative effects on export competitivity and even any detrimental
effect on investment. A good example of such a study is the work of ONARAN and OBST
on Wage-led Growth in the EU15 Member States (2016). This positive dynamic has been highlighted in the
model by prominent arrows. The policy implications for governments are clear!
Dynamik Linking Wage Increases to Higher Growth and Profits
System Thinking and Modelling of Brgy. Irawan, PPC (Biophysical, Cultural and Economic Component)