A Dynamic Synthesis of Basic Macroeconomic Theory

Model Name: A Dynamic Synthesis of Basic Macroeconomic Theory

Citation: Forrester, N.B. (1982) A Dynamic Synthesis of Basic Macroeconomic Theory: Implications for Stabilization Policy Analysis. PhD Dissertation, MIT Sloan School of Management.

Source: Provided by Nathan Forrester

Units balance: Yes, with 3 exceptions, evidently from the original publication

Format: Vensim

Notes: I mention this model in this article

A Dynamic Synthesis of Basic Macroeconomic Theory (Vensim .vpm)

Update: a newer version with improved diagrams and a control panel, plus changes files for a series of experiments with responses to negative demand shocks:

Download NFDis+TF-3.vpm or NFDis+TF-3.zip

The model runs in Vensim PLE, but you’ll need an advanced version to use the .cin and .cmd files included.

7 thoughts on “A Dynamic Synthesis of Basic Macroeconomic Theory”

  1. I find rather embarassing the three unit errors.
    Why are they not corrected?
    To my opinion, there are two options; either correct the errors or explain why it has been decided not to correct them.

    But leave things as it is, is not serious.


    1. I left them alone to preserve fidelity with the published work. Fortunately they don’t imply a conceptual problem – they’re essentially gain terms that somehow are mismatched with the underlying variables.

  2. Hi, I download the model
    there are simplified diagram and expanded diagram, but it seems the simplified diagram is mode complex than the expanded one, how to make it simple again? does the vensim has the notion of module?

    1. Hit the “H” key or use View>Show Hidden to hide/unhide the complex/messy stuff on the simplified diagram.

      Modularity would not help with this model, because it’s fairly densely connected.

  3. Hi Tom,
    I downloaded the model and I found an interesting issue.
    This is about a variable “Y_output” and “AY average output”.
    In the model “Y_output” is a flow (unit/year) and but there is “AY average output” (unit/year).
    Could you please explain why “AY average output” has a dimension “unit/year” as the symbol of “AY average output” is a stock.

    1. I think I depicted it that way because there’s a SMOOTH in the equation, which has an internal stock. However, the input and output units should match.

Leave a Reply

Your email address will not be published. Required fields are marked *

1 × = 9

This site uses Akismet to reduce spam. Learn how your comment data is processed.