Appraisal of System Dynamics and Utility in the Economic Analysis

Abstract

In the real world, the theory of economic faces many obstacles in its analyses and interpretations. One of these problems is overlapping relationships between specific variables and difficulty of determining perfect formulation which contain all possible effect. Traditional statistics tools like regression models try to solve this problem in general case, but it's not enough to give us more information about structure of the system. The interaction between variables, feedback information, state of the system and variables behavior through time and effect of exogenous variables. One of the most important modern method depend on stock and flow diagram, causal loop diagram ,and simulation programming, is Dynamics models. dynamics model help us to determine the behavior of the accumulation variables through the time (Population, Cultivable Area, Cultivated Area, Expectation of Oil Reserve, Reserve of LPG, Expectation of Natural Gas Reserve, Total Saving, Emplacement, Capital and DEBT) these make many scenarios to solve the problems now and in the future.

Keywords: Economic Analysis, Dynamic Systems, Models, Variables

JEL Classification: C80, C81, C82, C40, C60, C61, C62, C63, C67