System thinking Phil 130

1
System thinking Phil 130

• Economics
• Group Project

2
Group Members

• Brian Palmer
• James Murphy
• Brennan Beede
• Tuiasosopo Nivsulv

3
System Purpose

• The system purpose is to measure the nations
  economic productivity. By evaluating the US Gross
  Domestic Product you can sense of the economic
  health of the country.

4
System Model
5
System Model Graph
6
Elements

• Export
• Imports
• Consumption
• Inflation
• Investment
• Government Expenditures

7
Stock, Flows and Interconnections

• Stock
• Gross Domestic Product
• Flows
• Production
• Loss of Production
• Interconnections
• Money

8
Feedback Loop
Reinforcing Feedback Loop
9
Impact to the System

• An impact to the economic model would be the
  house market collapse.
• This occurred in the fall of 2008 was that the
  housing market became unstable due to a large
  amount of home loans going into default. This was
  a compound problem due to financial practices
  that were in place. Mortgages of several homes
  were bundled together and sold as securities on
  the open market, when these mortgages start to go
  into default there was no way to determine who
  was invested in these bad loans, causing these
  type of securities to become unstable and
  investors stopped investing in them. As money for
  new home loans became harder to come by the
  market was flooded with a large supply of homes,
  causing the value of homes to decline. The
  farther the value of homes fell the more people
  let their home loans go into default, adding to
  the problem. The prices will continue to fall
  until the price of homes become very affordable
  and then the demand will return stabilizing the
  housing market. Other factors come into play
  also, there has to be an increase in jobs so that
  there is money for people to spend on homes. In
  this way the housing market and the health of the
  economy are tied together.

10
Surprises from the Clouds

• Global War
• Natural Disasters
• Poor Economic News from other Countries