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System thinking Phil 130

System thinking Phil 130. Economics Group Project. Group Members. Brian Palmer James Murphy Brennan Beede Tuiasosopo Nivsulv. System Purpose.

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System thinking Phil 130

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  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

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