Modeling Dynamic Economic Systems

The frontiers of physical science and technology commanded attention dur- ing the last two centuries. In the next century lies the frontier of better un- derstanding of the behavior of social and economic systems. Ruth and Hannon join many other pioneers exploring this new frontier. By building on the profession of system dynamics, Ruth and Hannon con- tribute to movement away from purely mental models, which necessarily lack adequate precision, toward more insightful and disciplined computer simulation models. The STELLA software used in this book is one of several computer applications created to implement the concepts of system dynam- ics, a discipline that has been developed over the last 40 years and now ex- tends into many fields of activity. System dynamics is beginning, even in kindergarten through 12th grade education, to provide a rigorous founda- tion for dealing with dynamic change in mathematics, physics, social stud- ies, environment, history, and even literature. Education at every level will be changing from teaching isolated facts to allowing students to explore those systems within which facts, policies, and individual relationships are embedded to develop their ability to think in terms of dynamic systems. This book includes elementary instruction in system dynamics modeling and in the STELLA software. It covers a wide range of material from simple building blocks of systems to models and mathematics of considerable complexity. The material opens many avenues for further exploration, re- finement, and simplification.