3.2. Prognosis and Strategy
Problems
in Constructing the Model
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The lack of economic self-regulation mechanisms,
which were
acceptable from the viewpoint of the human factor,
inevitably engendered state regulation of the economy,
together with attempts to enhance it.
It transpired that the perfection of one or other method
of
management depends to a great extent on the ability to
appraise the consequences of implemented decisions for
sufficiently long periods of time and thereby predetermine
the strategy for economic development.
Such appraisals require ideological rather
than instrumental
formulation, and are currently represented by the ideology
of systems analysis and systems-dynamics modelling.
The powerful influence of systems analysis as ideological
orientation, especially of a practical nature, began to
be
manifested particularly strongly in economic research,
following the consolidation of the principle of inter-
relations between elements of a system via reciprocal ties.
The concept of "reciprocal contacts" clarified
the
regularity of the development and functioning of the widest
range of systems, including economic systems (econometrics
had singularly failed to achieve this goal), and served
as
the foundation for the scientific discipline called systems
dynamics, created as part of systems analysis.
Without broaching the general theoretical aspect of systems
dynamics, we will simply remark that systems-dynamics
modelling comes down basically to the mathematical
formalization of a whole complex of initial situations of
systems dynamics, and enables one to directly obtain
specific results, which are ready for application. The
specificity in this case literally denotes the figures
reflecting the future dynamics of all of the model 's
parameters, in tabular or graphic form.
Example
The graphs in figures 1 and 2 depict qualitatively
distinct
results of the modelling of two simple processes of
regulation, which differ only in the numerical value of
a
single parameter.
Figure 1
Amplification coefficient equal to -35
Figure 2
Amplification coefficient equal to -36
These processes may be interpreted economically
as well, but
it is far more important to draw the conclusion that even
very minor differences in systems with the most trivial
algorithmic and structural organization may lead to
behaviour, which is extemely varied qualitatively.
This example illustrates the topicality of application of
systems-dynamics modelling in everyday situations, from
the
position of general systems approaches. A control entity
which ignores this factor is unlikely to be very efficient.
Economic systems contain nothing new in their behavior.
This
can easily be demonstrated by building a model to imitate
the functioning of the economy of Nizhni Novgorod oblast.
For clarity's sake we will proceed from the simple to the
complex and cite three scenarios of this model.
Scenario 1
Let us assume that the aggregate production
of Nizhni
Novgorod oblast is ruled by the following:
- if demand exceeds supply (a deficit situation), a decrease
in demand and an increase in supply will occur;
- if supply exceeds demand (a case of surplus production),
an increase in demand and a decrease in supply will occur;
- if supply equals demand, no changes will occur.
According to the oblast's inter-regional
balance sheet for
1987, the value of the aggregate output produced by the
oblast was 10,133,873,300 roubles, while product totalled
6,861,277,700 roubles.
The results of the modelling are depicted in figure 3.
Figure 3
Dynamics of supply and demand for the aggregate
presents a classic, albie purely theoretical "utopia".
Scenario 2
Let us complicate the model. Let us assume
that the economy of Nizhni Novgorod oblast may be represented
by the functioning of the following production complexes:
1. Fuel and energy;
2. Metallurgy;
3. Machine building;
4. Chemicals and timber;
5. Building materials industry;
6. Light industry;
7. Food industry;
8. Other industrial sectors;
9. Agriculture;
10. Other sectors of material production.
The data on supply and demand were taken
from the inter-
regional balance sheet for 1987, and summarized in the
following table.
Supply and Demand (1,000 roubles)
Complex ______________________________Supply___________________
Demand
Fuel and energy_______________________________163547.4
_________________1277158.3
Metallurgy____________________________________737840.4_________________
1013485.8
Machine building ______________________________3578582.3_________________1147203.8
Chemicals and timber___________________________1532567.3________________
1153447.8
Construction materials industry ___________________378508.9_________________
128703.3
Light industry _________________________________1396836.0_________________
765103.8
Food industry _________________________________1425128.3
_________________586028.1
Other industrial sectors__________________________200935.6
__________________70229.4
Agriculture ____________________________________678191.7
_________________678191.7
Other sectors of material production_______________
41685.7___________________ 41685.7
The regulation mechanism of this variant
differs from the
logic of variant no 1. owing to the following addition:
- a state of deficit or surplus production in one complex
influences the supply and demand of all the complexes.
The results of the modelling are depicted
in figure 4.
Figure 4
Dynamics of production
Figure 5
Dynamics of production
A single comment is appropriate here --
that this is a non-
classic trend for a classic economy.
Scenario 3
Although scenario No 2 is too abstract for
the
elaboration of any practical recommendations on its basis,
it is still worthwhile to study its behaviour by changing
one (to simplify any interpretation) of the algorithms.
Given that in the preceding scenario the output of the
machine-building complex underwent the strongest change,
let
us maintain this output level as a constant.
The results of such an influence are depicted
in figure 5.
Of course, one should not claim that the
results of
modelling will always provide significant revelations.
Simple systems can also be analysed without dynamic
modelling. However, any attempt to obtain significant
practical results almost always requires more complicated
systems, as it is unlikely that a real economy will depend
on a simple system. In this case, the effectiveness of the
dynamic modelling is incomparable with that of any existing
alternatives.
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