Economics | Insight Maker

Goodwin business cycle model, modified from Keen and Blatt

On the occasion of th G20-meeting in Toronto, the German Economics minister Herr Schaüble said that without restoring confidence it would not be possible to get consumer spending and business investment going. Similar remarks were made by David Cameron and Señor Zapatero of Spain. All maintain that confidence is a pre-requisite to get growth going and that, therefore, it was imperative to reduce fiscal deficits. Reducing the fiscal deficit will restore confidence at first. However, reducing the deficit very quickly will introduce a dynamic that may cause the economy to decline - and perhaps depress consumers demand even further. It will actually destroy confidence: few businesses are inclined to invest in a shrinking economy. Cutting the deficit too rapidly or too steeply can lead to a confidence trap.

NOTE: A big experiment is now taking place in the UK - the government has cut public spending severely! Will this lead to hardship and, perhaps, social unrest?

Clone of Confidence Trap and Growth

Nilo Guimaraes

Goodwin business cycle model, modified from Keen and Blatt

Clone of Goodwin Business Cycle

Victor Hernandez

Map of SD work on Samuelson's 1939 model of the business cycle. See also D-memo D-2311-2 Gilbert Low 1976 and IM-165713. An alernative to the Ch 26 Macroeconomics textbook exposition. From Gil Low's Multiplier Accelerator Model of Business Cycles, Ch 4 of Elements of the System Dynamics Method Book edited by Jorgen Randers 1976 (MIT Press) and 1980 (Productivity Press)

Samuelson multiplier accelerator model

Geoff McDonnell

Overview

The model simulates how logging in with tourism(mountain biking) in Derby Tasmania.

How the model works.

Trees grow, loggers cut them in order to sell them because of demand for Timber.

Mountain cyclist depends on satisfaction and expectation. Satisfaction and Expectation depends on Scenery number of trees compared to visitor and Adventure number of trees and users. Park capacity limits the number of users. Local Business is influenced by the timber and number of Mountain Cyclist. Employment is influenced by the number of mountain cyclist and logging activity.

Simulation of Mountain Cyclist vs logging

Shu Wang

A government deficit means that more money has been transferred in the form of payments or investments from the government sector to the private sector than the government has received in taxes. As shown in the drawing, GOVERNMENT DEFICIT = INCOME AND SAVING for the private sector. Not all the income transferred from the government to the private sector will be employed and some of it will be saved in bank accounts. It is therefore correct to say that Government Deficits lead to Private Sector Saving. It is equally true to say that Investment leads to Saving. This is important because in the current recession one of the major problems is the massive amount of private debt. In these circumstances a cumulative government deficit is necessary to help the private sector save and repay some of its debt. Note: I have not taken into account the foreign sector here which can also contribute to private sector income and saving.

Deficit and Income

Hanns-Jürgen Hodann

Map of Geoffrey M Hodgson's 2015 Conceptualizing Capitalism book summary pdf

Clone of Capitalism

Edén Ernesto Gómez Encinas

Based on 2023 framework from Australian Treasury mapped into the Salutogenesis framework via social wellbeing

Measuring What Matters Framework

Geoff McDonnell

In a Dasgupta review lecture I heard 'welfare is stock, therefore it cannot be measured by GDP, since GDP is a flow'. This fascinated me. Therefore I am trying to make a stock-flow diagram of this.

Welfare is a stock

Henny van Dongen

WIP Clone of Conceptualizing Capitalism Insight to summarise Thorstein Veblen's writings on the Nature of Capital and other Institutional economics concepts

Veblen Nature of Capital

Geoff McDonnell

4

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:

Labor Supply = 100

Devation from the equilibrium conditions generates growth cycles.

Clone of Goodwin Model

Aaron Medlin

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

Guy Lakeman

3

WIP based mostly on Jan Toporowski 2013 vol 1 and 2018 vol 2 books on Michal Kalecki: An Intellectual Biography

Layout Consistent with David Wheat MacroEconomic model CLD Insight by Gene Bellinger

Kalecki economic thought

Geoff McDonnell

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

Hanns-Jürgen Hodann

Regulation of resource allocation to production in response to inventory adequacy and delivery delay. A non-price-mediated resource allocation system. From Sterman JD Business Dynamics p172 Fig 5-27

Availability Balancing Loops

Geoff McDonnell

$This model shows the operation of a simple economy. It demonstrates the effect of changes in the fractional rate of consumption (or the converse the fractional rate of saving.) In summary, lower rates of consumption (based on production) result in higher rates of production and consumption in the l$

This model shows the operation of a simple economy. It demonstrates the effect of changes in the fractional rate of consumption (or the converse the fractional rate of saving.)

In summary, lower rates of consumption (based on production) result in higher rates of production and consumption in the long-run.

Clone of Simple Economy: Model 8

Nickname

THE 2020 MODEL (BY GUY LAKEMAN) EMPHASIZES THE PEAK IN POLLUTION BEING CREATED BY OVERPOPULATION.
WITH THE CARRYING CAPACITY OF ARABLE LAND NOW BEING 1.5 TIMES OVER A SUSTAINABLE FUTURE (PASSED IN 1990) AND NOW INCREASING IN LOSS OF HUMAN SUSTAINABILITY DUE TO SEA RISE AND EXTREME GLOBAL WATER RELOCATION IN WEATHER CHANGES IN FLOODS AND DROUGHTS AND EXTENDED TROPICAL AND HORSE LATTITUDE CYCLONE ACTIVITY AROUND HADLEY CELLS

The World3 model is a detailed simulation of human population growth from 1900 into the future. It includes many environmental and demographic factors.

THIS MODEL BY GUY LAKEMAN, FROM METRICS OBTAINED USING A MORE COMPREHENSIVE VENSIM SOFTWARE MODEL, SHOWS CURRENT CONDITIONS CREATED BY THE LATEST WEATHER EXTREMES AND LOSS OF ARABLE LAND BY THE ALBEDO EFECT MELTING THE POLAR CAPS TOGETHER WITH NORTHERN JETSTREAM SHIFT NORTHWARDS, AND A NECESSITY TO ACT BEFORE THERE IS HUGE SUFFERING.

BY SETTING THE NEW ECOLOGICAL POLICIES TO 2015 WE CAN SEE THAT SOME POPULATIONS CAN BE SAVED BUT CITIES WILL SUFFER MOST.

CURRENT MARKET SATURATION PLATEAU OF SOLID PRODUCTS AND BEHAVIORAL SINK FACTORS ARE ALSO ADDED

Use the sliders to experiment with the initial amount of non-renewable resources to see how these affect the simulation. Does increasing the amount of non-renewable resources (which could occur through the development of better exploration technologies) improve our future? Also, experiment with the start date of a low birth-rate, environmentally focused policy.

WORLD2020 to PLANET2020

Guy Lakeman

12

An initial study of the economics of single use coffee pods.

Clone of Coffee Pods ISD Humanities v 1.02

Fabienne Albrecht

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

Claudio Bergamini

Sandbox for testing InsightMaker features using pipeline Construction & ROW land conversion as a driver of changes in ecosystem service value.

Clone of ESV Test

Sonia Wang

Goodwin business cycle model, modified from Keen and Blatt

Clone of Goodwin Business Cycle

theuns Dirkse van schalkwyk

An initial study of the economics of single use coffee pods.

Clone of Claire - Coffee Pods ISD Humanities v 1.02

Claire Smith

$This model shows the structure and operation of a simple economy. It can represent economic systems at different levels of abstraction (e.g. a single good, a group of goods, multiple groups, & an "economy.") This model has one significant difference from Model 4. The fractional consumption rat$

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.")

This model has one significant difference from Model 4. The fractional consumption rate table serves the purpose of demonstrating the effects of changes in the fractional consumption rate (or the converse the fractional rate of saving) from 100% to less-than 100% to more-than 100%.

It demonstrates dramatically the effects of significant changes in consumption rates.

Simple Economy: Model 5