Nathan Forrester built his model of the Canadian economy in
DYNAMO which was the original System Dynamics language developed in the early 1970’s
but is no longer supported. Therefore,
the first thing we did was convert the model to the modern System Dynamics
software environment, Vensim. Fortunately,
Nathan had used the same excellent documentation standards as his father, Jay
Forrester, the inventor of System Dynamics.
So this conversion was not difficult.
The model was initialized to the year 1900. It was calibrated to provide representative
results for 1972. Then it ran to the year 2150. Nathan provided
both graphical results and tabular results for many intermediate
variables. We were able to replicate the
results of Nathan’s original model to 7 decimal places.
Nathan also provided a number of diversions from the
standard model that we were able to replicate.
These were useful because some of the diversions appeared to model the
Canadian economy more realistically than the original model.
The model consisted of five sectors of the economy:
agriculture, goods, services, capital and resources. We used data from Statistics Canada on the
production in these sectors of the economy to calibrate the model. In the graph below, the smooth curves are
taken from the model and the jagged curves are the Statistics Canada data.
The agriculture, goods and services sectors use labour,
capital and resources which are allocated according to a competitive process. Each of these economic sectors is derived
from a common template. So it was easy
to build two new sectors for Defence expenditure and government expenditure excluding
Defence. I will postpone the discussion
of these extensions to Nathan Forrester’s model until my next post.
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