Economic System Models

Simple models of economic systems — with carefully controlled limits — can prove useful in demonstrating specific parts of economic theory.

Jay Forrester

Jay Forrester
Developer of System Dynamics

Modeling a Simple Economy

As complex adaptive systems markets do not lend themselves to mathematical models — in spite of the practice of many economic practitioners. If one is careful about the variables used, however, simple models can prove useful in demonstrating economic theory.

I have begun this section on economic system models with models of a simple economy in order to introduce some fundamental concepts about models and the economy. (Although you can view each part separately, I strongly suggest that you work through them in sequence.)