Modeling Dynamic Economic Systems, Volume 1

Front Cover
Springer Science & Business Media, 1997 - Business & Economics - 339 pages
This book explores the dynamic processes in economic systems, concentrating on the extraction and use of the natural resources required to meet economic needs. Sections cover methods for dynamic modeling in economics, microeconomic models of firms, modeling optimal use of both nonrenewable and renewable resources, and chaos in economic models. This book does not require a substantial background in mathematics or computer science. STELLA II and MADONNA run-tim software and computer files of sample models accompany the book on a CD-ROM. The software is compatible with both Macintosh- and Windows-based systems.
 

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Contents

Modeling Dynamic Systems
3
12 Static Comparative Static and Dynamic Models
5
13 Model Components
7
14 Modeling in STELLA
9
15 Modeling Principles
19
16 Model Confirmation
21
17 Modeling of Natural Resource Use
23
18 Extending the Modeling Approach
25
172 Sudden Demand Shift
186
173 SShaped Substitution Model
188
Competitive Scarcity with Cost Dependent on Production Rate and Resource Size
194
Competitive Scarcity with Technical Change
198
Competitive Scarcity with Exploration
203
Monopoly Scarcity
209
Monopoly Scarcity with Variable Interest Rate
215
Monopoly Scarcity with Cost Dependent on Production Rate and Resource Size
220

Disaggregation of Stocks
30
Methods for Dynamic Modeling
35
System Boundaries in Space and Time
37
32 Energy Cost of Production at the Level of the Firm
38
33 Extending the System Boundaries
41
34 Sensitivity Analysis
48
Scheduling Flows
56
42 Modeling Discrete Flows in Space and Time
57
43 Optimizing Traffic Flow
62
Positive Feedback in the Economy
76
Derivatives and Lags
82
Some Applications
86
622 TwoOutput Firm
88
Microeconomic Models of Firms
91
Introduction to Modeling Economic Processes
93
Substitution of Inputs in Production
95
82 Profit Maximization with Several Inputs
98
Time Value
102
92 CostBenefit Analysis
107
Opportunity Cost1
112
The ProfitMaximizing Competitive Firm
120
The ProfitMaximizing Monopoly
127
122 Effects of Taxes on Monopolistic Output and Price
131
123 Monopolistic Production and Pollution
134
Monopolistic Collusion
141
QuasiCompetitive Equilibrium
147
142 Use of MADONNA with STELLA
152
Modeling Economic Games
154
152 Barter Economy
157
153 SealedBid SecondPrice Auction Game2
160
Modeling Optimal Use of Nonrenewable Resources
169
Competitive Scarcity
171
162 Competitive Scarcity with Various DT
180
Competitive Scarcity with Substitution
183
Modeling Optimal Use of Renewable Resources
225
Optimal Timber Harvest
227
Managing Open Access Resources
233
Optimal Harvest from Fisheries
246
PredatorPrey Models of Fisheries
255
272 Fishing with Nonmalleable Capital
260
Spatial Fishery Model
266
282 Management of a Multiregion Fishery
276
Chaos in Economic Models
283
Preference Cycles and Chaos
285
Nonmonotonic Demand and Supply Curves
292
Price Expectation and Production Lags
298
Chaos in Macroeconomic Models
304
Conclusions
309
Building a Modeling Community
311
Appendix
313
A2 Installation Instructions for Windows Version
314
A3 Quick Help Guide
315
A32 Drawing an Inflow to a Stock
316
A33 Drawing an Outflow from a Stock
317
A34 Replacing a Cloud with a Stock
318
A35 Bending Flow Pipes
319
A37 Reversing Direction of a Flow
320
A39 Moving Variable Names
321
A310 Drawing Connectors
322
A311 Defining Graphs and Tables
323
A312 Dynamite Operations on Graphs and Tables
324
MADONNA Quick Start
325
B22 Compiling the Model
326
B24 The Graph Window
327
References
329
Index
331
Copyright

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About the author (1997)

Jay Wright Forrester was born on his family's cattle ranch in Nebraska on July 14, 1918. He studied electrical engineering at the University of Nebraska and graduate studies in electrical engineering at M.I.T. In 1940, he went to work at M.I.T.'s new Servomechanisms Laboratory, doing research in servomechanism theory and feedback control systems. During World War II, the laboratory did much of its work for the military by developing servomechanisms for controlling radar antennas and gun mounts. He worked for M.I.T. for about 70 years. His insights into both computing and organizations helped give rise to a field of computer modeling that examines the behavior of things as specific as a corporation and as broad as global growth. He wrote several books including Urban Dynamics, World Dynamics, Industrial Dynamics, and Principles of Systems. He died from complications of prostate cancer on November 16, 2016 at the age of 98.

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