Utilizing System Dynamics Models in Analyzing Macroeconomic Variables of Yemen

Mohamed, Issam A.W. (2011): Utilizing System Dynamics Models in Analyzing Macroeconomic Variables of Yemen.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: System Dynamics, Macroeconomic Variable, Economic Analysis, Yemen
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models; C - Mathematical and Quantitative Methods > C0 - General; A - General Economics and Teaching > A1 - General Economics; C - Mathematical and Quantitative Methods > C0 - General > C00 - General; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C67 - Input-Output Models; A - General Economics and Teaching > A1 - General Economics > A10 - General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B40 - General; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C20 - General; C - Mathematical and Quantitative Methods > C0 - General > C02 - Mathematical Methods; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C15 - Statistical Simulation Methods: General; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C30 - General; C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics

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