Some Basic Concepts in System Dynamics - Creative Learning ...

- 14 - D-48946.1. Generic Structure of a Clock and Economic Business CycleVelocityEmploymentChange inpositionProductionrate less salesAccelerationHiring rateFigure 10PositionInventoryA-3865Ad.5JWF39Figure 10shows two sets ofnomenclature. Thelabels above thebars relate to theswinging pendulumof a clock. Thelabels below thebars describeinventory andemployment inmanufacturing.With appropriatechoices of parametervalues, the structurewill exhibit theoscillation of a onesecondclock pendulum, or alternatively the several-year interval between peaks ofa business cycle. The single loop with two levels as in Figure 10 results in only asustained oscillation. Additional structure is necessary to represent friction in apendulum or the forces that might change the amplitude of business cycles. Aswinging pendulum and the central core of the production-inventory business cyclehave the same oscillatory structure.In my own experience with transferability of structure, I was meeting with agroup of medical doctors and pharmacologists in Palo Alto one day. A topic cameup that was not on the agenda. They began to talk about a doctor who was doingan experimental treatment, which clearly those present did not approve. They haddescribed the experiment but had said nothing of the results when I suggested anoutcome. I told them that if I were to judge that medical experiment on the basisof the kind of behavior that we had seen in the Urban Dynamics model of cities, Iwould guess the treatment would cause atrophy of the pancreas. They said,“You’re right. That’s exactly what’s happening.” There was enough