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Models
Dynamic macro-economic model of a national economy with production, consumption, capital investment, labor market with unemployment, price level, money supply, inventory cycles, shocks more...
This model simulates the evolution of a national economy using system dynamics. The mathematical methods are useful more generally in dynamic stochastic models used in actuarial and investment management applications.
It has four economic models of increasing complexity.
- The first model is a basic macro-economic model of demand, employment and capital investment with normally distributed random shocks in aggregate demand and output. (The Light version)
- The second model extends the first model by adding a rudimentary financial market to the production economy. It has a variable interest rate and a variable demand for capital. The financial market model is based on the IS-LM model presented by Hicks in 1937. (The Standard version)
- The third model extends the second model by adding a variable price level with a constant money supply to the production and financial markets. It is based on the aggregate supply aggregate demand model. (The Advanced version without optional features)
- The fourth model adds an inventory adjustment mechanism. Adjustment of inventory is a significant factor in short-term business cycles. Meltzer outlined early macroeconomic inventory adjustment models in 1941. It also includes a lagged unemployment variable that does not affect the rest of the model and is used only for analysis. (The Advanced version with optional features)
Source: "A Dynamic Synthesis of Basic Macroeconomic Theory: Implications for Stabilization and Policy Analysis," by Nathan B. Forrester, Ph.D. thesis at M.I.T. Sloan School of Management, 1982. URL: http://hdl.handle.net/1721.1/15739
ModelSheet Software is solely responsible for any errors in this derivative work.
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Dynamic Monte Carlo simulation of an economy with shocks and multiple trials. Economic model has production, consumption, capital investment, labor market with unemployment, price level, money supply, inventory cycles. more...
This model performs a dynamic Monte Carlo simulation of a national economy using system dynamics. The mathematical methods are useful more generally in dynamic stochastic models used in actuarial and investment management applications.
It has four economic models of increasing complexity.
- The first model is a basic macro-economic model of demand, employment and capital investment with normally distributed random shocks in aggregate demand and output. (The Light version)
- The second model extends the first model by adding a rudimentary financial market to the production economy. It has a variable interest rate and a variable demand for capital. The financial market model is based on the IS-LM model presented by Hicks in 1937. (The Standard version)
- The third model extends the second model by adding a variable price level with a constant money supply to the production and financial markets. It is based on the aggregate supply aggregate demand model. (The Advanced version without optional features)
- The fourth model adds an inventory adjustment mechanism. Adjustment of inventory is a significant factor in short-term business cycles. Meltzer outlined early macroeconomic inventory adjustment models in 1941. It also includes a lagged unemployment variable that does not affect the rest of the model and is used only for analysis. (The Advanced version with optional features)
Source: "A Dynamic Synthesis of Basic Macroeconomic Theory: Implications for Stabilization and Policy Analysis," by Nathan B. Forrester, Ph.D. thesis at M.I.T. Sloan School of Management, 1982. URL: http://hdl.handle.net/1721.1/15739
ModelSheet Software is solely responsible for any errors in this derivative work.
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