Modeling limits to growth
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Duggan J. (2016) Modeling Limits to Growth. In: System Dynamics Modeling with R. Lecture Notes in Social Networks. Springer, Cham
This chapter introduces system dynamics models of limits to growth. First, a one-stock model is presented, where the growth rate varies, and is influenced by the system’s carrying capacity. Second, a model of economic growth is described, which captures the law of diminishing returns, a feature of many economic systems. Third, a two-stock model of limits to growth is specified, where a growing stock consumes its carrying capacity, and this dynamic leads to growth followed by rapid decline. Before introducing the limits to growth models, an explanation of an important formulation method in system dynamics is presented. This allows modelers to construct robust equations to model the effect of one variable on another. This is useful for many system dynamics models, particularly where one system stock influences another system stock.