A sample model for class discussion modeling COVID-19 outbreaks and responses from government with the effect on the local economy.  Govt policy is dependent on reported COVID-19 cases, which in turn depend on testing rates less those who recover

'Efficiencyism’  can be described as a blind belief in the effectiveness of efficiency measures without taking into account circumstances and the wider context.   The graph on the left shows how the frequent use of the term 'efficiency' at the level of local interactons can lead to the emergence of  'efficiencyism' through upward causation, denoted by the arrows pointing upwards.  However, there is also downward causation from the global level depicted by the red arrows which can increase the blind application of efficiency measures at the local level. In other words, efficiency for the sake of efficiency becomes a dominant idea.  The tyrannical influence of 'eficiencyism' affects all of us to varying degrees and unfortunately can often have very negative side effects, such as an increase in unemployment, social injustice and even increase inequality.  Of  course, well-thought-out efficiency improvements can also bring great  benefits.   I recommend reading an excellent article by Dr. Charles Chandler, who explains the term 'efficiencyism' with some excellent examples and also points to some  of its undesirable effects.

How the 4-H club became a marketing thingy for DuPont

'Efficiencyism’  can be described as a blind belief in the effectiveness of efficiency measures without taking into account circumstances and the wider context.   The graph on the left shows how the frequent use of the term 'efficiency' at the level of local interactons can lead to the emergence of  'efficiencyism' through upward causation, denoted by the arrows pointing upwards.  However, there is also downward causation from the global level depicted by the red arrows which can increase the blind application of efficiency measures at the local level. In other words, efficiency for the sake of efficiency becomes a dominant idea.  The tyrannical influence of 'eficiencyism' affects all of us to varying degrees and unfortunately can often have very negative side effects, such as an increase in unemployment, social injustice and even increase inequality.  Of  course, well thought out efficiency improvements can also bring great  benefits.   I recommend reading an excellent article by Dr. Charles Chandler, who explains the term 'efficiencyism' with some excellent examples and also points to some  of its undesirable effects.

http://www.ageofoe.com/010-efficiencyism-holds-us-back/

Model supporting research of investment vs. austerity implications. Please refer to additional information on the SystemsWiki Focus Page and Modern Money & Public Purpose Video.

The statement that there can be no economic activity without  energy and that fossil fuels are finite contrasts with the fact that money is not finite and can be created by governments via their central banks at zero marginal cost whenever needed.

An important fact about COAL, GAS and OIL (even when produced via fracking) is that their net energy ratios are falling rapidly. In other words the energy needed to extract a given quantity of fossil fuels is constantly increasing. This ratio (Energy Invested on Energy Returned - EIOER) provides yet another warning that we can no longer rely on fossil fuels to power our economies. We cannot wait until the ratio falls to 1/1 before we invest seriously in alternative sources of energy, because by then industrial society as we know it doday will have ceased to exist. 

PS: A link between growth in energy consumption and GDP growth is clearly illustrated on slide 13 of Gail Tverberg's presentaion entitled ''Oops! The world economy depends on an energy-related bubble''. In fact, the slide shows that growth in energy consumption usually precedes GDP growth.

https://gailtheactuary.files.wordpress.com/2015/10/oops-debt-bubble-10_30_15.pdf

How the 4-H club became a marketing thingy for DuPont

The Cred System is an alternative to traditional currency that increases community resiliency and reduces participant's dependence on traditional dollars. This model is a basic description of the Cred System, involving four people and two loops.

Modern Monetary theory (MMT) has shown how modern monetary systems actually work. It has shown  that governments that issue their own currency, such as the US, can never run out of money or be forced to default on debt issued in their own currency. It has also demonstrated that government spending to stimulate the economy is logical and that the resulting deficit is irrelevant - the government always has the monetary means to eliminate it. This directly contradicts neoliberal doctrine that wants to limit government spending and posits that deficits destabilize the economy. Neoliberalism often constitutes a 'worldview' and 'personal identity'. Those who hold such strong beliefs cannot be persuaded to abandon them using rational arguments and facts - psychological reasons usually impede it as research has shown. The worldwide dominance of the doctrine, vested interests and psychologically grounded opposition suffocate MMT and rational arguments showing its superiority are seemingly of no avail. 

Fig 9.5 Integrated China SD model from Zhang 2018 MIT Thesis Potential housing bubble with Chinese characteristics

Model showing the effect of bank lending of deposited money as a multiplier in the creation of new money. Multiplier effect is shown as related to the bank reserve requirement on deposited funds.

Overview

This model simulates logging and mountain biking competition in Derby, Tasmania. The Simulation is referenced to simulate Derby mountain biking with logging.

 

Model Work

The tourism industry is represented on the model's left side, and the logging industry is on the right side. Interactions between these two industries generate tax revenues. Logging and tourism have different growth rates regarding people working/consuming. The initial values of these two industries in the model are not fixed but increase yearly due to inflation or economic growth.

 

Detail Insights

From the perspective of tourism, as the number of tourists keeps growing, the number of people who choose to ride in Derby City also gradually increases. And the people who ride rate the ride. The negative feedback feeds back into the cycling population. Similarly, positive cycling reviews lead to more customer visits. And all the customers will create a revenue through tourism, and a certain proportion of the income will become tourism tax.

From a logging perspective, it is very similar to the tourism industry. As the number of people working in the industry is forecast to increase, the industry's overall size is predicted to grow. And as the industry's size continues to rise, the taxes on the logging industry will also continue to rise. Since logging is an industry, the tax contribution will be more significant than the tourism excise tax.

 

This model assumption is illustrated below:

1. The amount of tax reflects the level of industrial development.

2. The goal of reducing carbon emissions lets us always pay attention to the environmental damage caused by the logging industry.

3. The government's regulatory goal is to increase overall income while ensuring the environment.

4. Logging will lead to environmental damage, which will decrease the number of tourists.

 

This model is based on tourism tax revenue versus logging tax revenue. Tourism tax revenue is more incredible than logging tax revenue, indicating a better environment. As a result of government policy, the logging industry will be heavily developed in the short term. Growth in the logging industry will increase by 40%. A growth rate of 0.8 and 0.6 of the original is obtained when logging taxes are 2 and 4 times higher than tourism taxes.

 

Furthermore, tourism tax and logging tax also act on the positive rate, which is the probability that customers give a positive evaluation. The over-development of the logging industry will lead to the destruction of environmental resources and further affect the tourism industry. The logging tax will also affect the tourism Ride Rate, which is the probability that all tourism customers will choose Derby city.

 

This model more accurately reflects logging and tourism's natural growth and ties the two industries together environmentally. Two ways of development are evident in the two industries. Compared to tourism, logging shows an upward spiral influenced by government policies. Government attitudes also affect tourism revenue, but more by the logging industry. 

Model showing the effect of bank lending of deposited money as a multiplier in the creation of new money. Multiplier effect is shown as related to the bank reserve requirement on deposited funds.

Model supporting research of investment vs. austerity implications. Please refer to Modern Money & Public Purpose Video.

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A model to gain understanding of the causes and effects of a population's interest in engineering.

ABOUT THE MODEL

This is a dynamic model that shows the correlation between the health-related policies implemented by the Government in response to COVID-19 outbreak in Burnie, Tasmania, and the policies’ impact on the Economic activity of the area.

 ASSUMPTIONS

The increase in the number of COVID-19 cases is directly proportional to the increase in the Government policies in the infected region. The Government policies negatively impact the economy of Burnie, Tasmania.

INTERESTING INSIGHTS

1. When the borders are closed by the government, the economy is severely affected by the decrease of revenue generated by the Civil aviation/Migration rate. As the number of COVID-19 cases increase, the number of people allowed to enter Australian borders will also decrease by the government. 

2. The Economic activity sharply increases and stays in uniformity. 

3. The death rate drastically decreased as we increased test rate by 90%.

Model showing the effect of bank lending of deposited money as a multiplier in the creation of new money. Multiplier effect is shown as related to the bank reserve requirement on deposited funds.

Model showing the effect of bank lending of deposited money as a multiplier in the creation of new money. Multiplier effect is shown as related to the bank reserve requirement on deposited funds.

Model showing the effect of bank lending of deposited money as a multiplier in the creation of new money. Multiplier effect is shown as related to the bank reserve requirement on deposited funds.

This is the original model version (v1.0) with default "standard run" parameter set: see detailed commentary here and here. As of 2 September 2015, ongoing development has now shifted to this version of the model.

The significance of reduced energy return on energy invested (EROI) in the transition from fossil fuel to renewable primary energy sources is often disputed by both renewable energy proponents and mainstream economists.​ This model illustrates the impact of EROI in large-scale energy transition using a system dynamics approach. The variables of primary interest here are: 1) net energy available to "the rest of the economy" as renewable penetration increases [Total final energy services out to the economy]; and 2) the size of the energy sector as a proportion of overall economic activity, treating energy use as a very rough proxy for size [Energy services ratio].
This model aggregates energy supply in the form of fuels and electricity as a single variable, total final energy services, and treats the global economy as a single closed system.
The model includes all major incumbent energy sources, and assumes a transition to wind, PV, hydro and nuclear generated electricity, plus biomass electricity and fuels. Hydro, biomass and nuclear growth rates are built into the model from the outset, and wind and PV emplacement rates respond to the built-in retirement rates for fossil energy sources, by attempting to make up the difference between the historical maximum total energy services out to the global economy, and the current total energy services out. Intermittency of PV and wind are compensated via Li-ion battery storage. Note, however, that seasonal variation of PV is not fully addressed i.e. PV is modeled using annual and global average parameters. For this to have anything close to real world validity, this would require that all PV capacity is located in highly favourable locations in terms of annual average insolation, and that energy is distributed from these regions to points of end use. The necessary distribution infrastructure is not included in the model at this stage.
It is possible to explore the effect of seasonal variation with PV assumed to be distributed more widely by de-rating capacity factor and increasing the autonomy period for storage.

This version of the model takes values for emplaced capacities of conventional sources (i.e. all energy sources except wind and PV) as exogenous inputs, based on data generated from earlier endogenously-generated emplaced capacities (for which emplacement rates as a proportion of existing installed capacity were the primary exogenous input).