Utilizing System Dynamics Models in Analyzing Macroeconomic Variables of Yemen

Issam Mohamed ()

MPRA Paper from University Library of Munich, Germany

Abstract: The purpose of the System Dynamics method is to study the relationship between structure and behavior in non-linear, dynamic systems. In such systems, the significance of various structural components to the behavior pattern exhibited, changes as the behavior unfolds. Changes in structural significance modify that behavior pattern which, in turn, feeds back to change the relative significance of structural components. We develop a macroeconomic model through which we can study the characteristics of the feedback between structure and behavior. This model is based on multiplier-accelerator model, and inventory – adjustment model. This work is an extension of the work by Nathan Forrester on the use of basic macroeconomic theory to stabilize policy analysis. The design of a System Dynamics model begins with a problem and a time frame that contribute to the problem. They are listed and their structural relationships sketched the factors with particular attention to characterizing them as levels (or stocks) and rates (or flows) that feed or drain them. Levels and rates must alternate in the model; no level can control another without an intervening rate or any rate influence another without an intervening level.

Keywords: System Dynamics; Macroeconomic Variable; Economic Analysis; Yemen (search for similar items in EconPapers)
JEL-codes: A1 A10 B40 C0 C00 C01 C02 C1 C10 C15 C20 C22 C30 C67 C68 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cwa
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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