Fed Affects on the Economy
This is part of series of model implemented from "Thinking in Systems" book by Donella Meadows
Thinking in Systems - Economic Capital - Fig 37, 44
Adapted from Hartmut Bossel's "System Zoo 3 Simulation Models, Economy, Society, Development."
Population model where the population is summarized in four age groups (children, parents, older people, old people). Used as a base population model for dealing with issues such as employment, care for the elderly, pensions dynamics, etc.
Clone of Clone of Z602 Population with four age groups
An initial study of the economics of single use coffee pods.
Helene D. Coffee Pod Investigation
Goodwin Model:
This is a basic version of the Goodwin Model based on Kaoru Yamagushi (2013), Money and Macroeconomic Dynamics, Chapter 4.5 (link)
Equilibrium conditions:
Devation from the equilibrium conditions generates growth cycles.
Goodwin Model
HANDY Model of Societal Collapse from Ecological Economics
Paper see also D Cunha's model at IM-15085
Clone of Human and Nature Dynamics of Societal Inequality
Simulating Hyperinflation for 3650 days.
If private bond holdings are going down and the government is running a big deficit then the central bank has to monetize bonds equal to the deficit plus the decrease in private bond holdings. We don't show the details of the central bank buying bonds here, just the net results.
See blog at http://howfiatdies.blogspot.com for more on hyperinflation, including a hyperinflation FAQ.
Clone of Hyperinflation Simulation
An initial study of the economics of single use coffee pods.
Coffee Pods ISD Humanities v 1.01
Cutbacks can have a counterintuitive effect. The government knows precisely how much it custs in spending. However, it cannot know the extent to which tax revenues shrink in a non-linear complex economic system as the economy contracts. In addition, the treasury has to spend more as automatic stabilizers activate and payments are made to an increasing number of unemployed workers. The effect of this is that initially the deficit shrinks, but later it rises as tax revenues fall short of expectations and more spending takes place. The ironic part is that often the very indicator that promted austerity measurs, the defcit to GDP ratio, becomes worse than it was at the outset. We could observe this in Spain and Portugal where planned deficits have been repeatedly missed, as austerity measures (fiscal cutbacks) were introduced to deal with the effects of the 2008 financial crisis.
CUTBACKS OFTEN MAKE FISCAL DEFICITS WORSE
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..
Clone of Price control mechanism
This model
shows the basic functioning and dynamics of a 'modern monetary system'.
The non-government
sectors, consisting of the private and foreign sectors initial y starts with
zero currency units. It is important to realize that after creating a new currency the government
must first spend currency units into the economy before they can be used:
without currency units the private sector could not even pay taxes! A government
that has its own freely floating currency can create a much money as it wants.
It does not need tax receipts to finance its spending, and any money it spends into
the economy above that collected in taxes represents income for the private
sector. The model show that the government initially created 9 trillion money units,
but spent only six trillion into the economy. The six trillion showed up as a government
deficit but as wealth in the non-government sector.
Since the government
can create as many money units as it wishes and transfer them to
the private sector to ensure an adequate
level of demand in the in the economy, austerity is unnecessary: money is available,
though real resource may be scarce. This also shows that the government can
contribute actively towards the creation of prosperity.
Please note that this model was originally
created by Gene Bellinger, IM 3206, from which this version was cloned.
Clone of Clone of Austerity vs Prosperity
THE BROKEN LINK BETWEEN SUPPLY AND DEMAND CREATES TURBULENT CHAOTIC DESTRUCTION
The existing global capitalistic growth paradigm is totally flawed
Growth in supply and productivity is a summation of variables as is demand ... when the link between them is broken by catastrophic failure in a component the creation of unpredictable chaotic turbulence puts the controls ito a situation that will never return the system to its initial conditions as it is STIC system (Lorenz)
The chaotic turbulence is the result of the concept of infinite bigness this has been the destructive influence on all empires and now shown up by Feigenbaum numbers and Dunbar numbers for neural netwoirks
See Guy Lakeman Bubble Theory for more details on keeping systems within finite working containers (villages communities)
Clone of Clone of THE BROKEN LINK BETWEEN SUPPLY AND DEMAND CREATES CHAOTIC TURBULENCE (+controls)
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
Clone of Service Quality Balancing Loops
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.")
In summary, lower rates of consumption (based on production) result in higher rates of production and consumption in the long-run. Rates of consumption over 100% of production will diminish the savings stock and eventually cause rates of production and consumption to fall.
Clone of Simple Economy: Model 6
HANDY Model of Societal Collapse from Ecological Economics
Paper see also D Cunha's model at IM-15085
Clone of Human and Nature Dynamics of Societal Inequality
This model tries to replicate the economy as is considered in LTG "Limits to Growth" by Meadows et al.
Clone of Simple Economy: Model 5
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.
Clone of Minsky Financial Instability Model
Implementation of a DSGE Model solved in a Macroeconomics class by Harald Uhlig (
link), using Rational Expectations, in this case, the Hansens Real Business Cycle Model.
It shows the capacity of implementing Dynamic Stochastic General Equilibrium Model Analysis using System Dynamics.
Clone of Real Business Cycle Model (DSGE)
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.
Clone of Minsky Financial Instability Model
A simple implementation of a Dynamic ISLM model as proposed by Blanchard (1981), and taken from An introduction to economic Dynamics - Shone (1997) - chapter 5. This model might serve as a framework to evaluate economic policies over GDP growth.
Dynamic ISLM Model
Climate Sector Boundary Diagram By Guy Lakeman Climate, Weather, Ecology, Economics, Population, Welfare, Energy, Policy, CO2, Carbon Cycle, GHG (green house gasses, combined effects)
As general population is composed of 85% with an education level of a 12 grader or less (a 17 year old), a simple block of components concerning the health of the planet needs to be broken down into simple blocks.
Perhaps this picture will show the basics on which to vote for a sustained healthy future
Democracy is only as good as the ability of the voters to FULLY understand the implications of the policies on which they vote., both context and the various perspectives. National voting of unqualified voters on specific policy issues is the sign of corrupt manipulation.
Climate Sector Boundary Diagram of Guy Lakeman
Adapted from Hartmut Bossel's "System Zoo 3 Simulation Models, Economy, Society, Development."
Population model where the population is summarized in four age groups (children, parents, older people, old people). Used as a base population model for dealing with issues such as employment, care for the elderly, pensions dynamics, etc.
Clone of Z602 Population with four age groups
Adapted from Hartmut Bossel's "System Zoo 3 Simulation Models, Economy, Society, Development."
Population model where the population is summarized in four age groups (children, parents, older people, old people). Used as a base population model for dealing with issues such as employment, care for the elderly, pensions dynamics, etc.
[WIP] Z602 Population with four age groups, Czech Republic
An initial study of the economics of single use coffee pods.
Clone of Clone of Coffee Pods ISD Humanities v 1.02
