MacroLab Lite for Introductory Macroeconomics
undefinedSystem Dynamics Group
M
M
a
a
c
c
r
r
o
o
L
L
a
a
b
b
L
L
i
i
t
t
e
e
f
f
o
o
r
r
I
I
n
n
t
t
r
r
o
o
d
d
u
u
c
c
t
t
o
o
r
r
y
y
M
M
a
a
c
c
r
r
o
o
e
e
c
c
o
o
n
n
o
o
m
m
i
i
c
c
s
s
I. David Wheat, PhD, MPP
I. David Wheat, PhD, MPP
Professor Emeritus, University of Bergen
Professor Emeritus, University of Bergen
david.wheat@uib.nodavid.wheat@uib.no
41
41
st
st
International System Dynamics Conference
International System Dynamics Conference
Chicago, July 25, 2023
Chicago, July 25, 2023
Professor, Economic Dynamics
National University of Kyiv-Mohyla Academy, Ukraine
Professor, Economics
Virginia Western Community College, USA
2
MacroLab Lite
: a Work in Progress
M
o
t
i
v
a
t
i
o
n
:
r
e
c
o
v
e
r
o
r
i
g
i
n
a
l
m
o
t
i
v
a
t
i
o
n
t
o
s
t
u
d
y
s
y
s
t
e
m
d
y
n
a
m
i
c
s
&
b
u
i
l
d
M
a
c
r
o
L
a
b
.
Over time,
MacroLab
grew like topsy —
• used for advanced instruction & policy analysis
• detailed structure (financial structure, multiple industries, multiple households)
It’s time
to
put a macro model back in the hands of young students.
Emphasis on simple equations, with just a few basic SD structures applied throughout.
Current version of
MacroLab Lite
Well-developed Supply Side and a highly aggregated Demand Side.
Almost entirely endogenous.
Only exogenous inputs:
- SS: growth rates of the civilian adult population & labor force participation
- DS growth rate in total debt, both private and public.
N
ext upgrades: more sub-models
• Financial sector -- including monetary policy.
• Households, Firms, Government, and the Rest-of-the-World.
3
Demand Side
Supply Side
Overview of
MacroLab Lite
4
Simulation Results with Exogenous Growth in Debt
dark curve: constant growth rate
light curve: fluctuating growth rate
5
Simulation Results with Exogenous Growth in Debt
fluctuating growth rate
∆ debt
Inflation
unemployment
rate
real AD growth rate
_______
real GDP growth rate
……………
UR
%∆
6
Online Version of
MacroLab Lite
https://exchange.iseesystems.com/public/david-wheat/litesdc
7
Production & Sales (PS) Sub-Model
8
Labor & Capital (LC) Sub-Model
Capital
Employed Labor
& Productivity
Unemployment Rate
& Employment Rate
9
Capital Sector within LC Sub-Model
10
Employment & Productivity Sector within LC Sub-Model
11
Unemployment Rate & Employment Rate within LC Sub-
Model
12
Wage & Price (WP) Sub-Model
13
Highly Aggregated Demand Side
14
I. David Wheat
Emeritus Professor of System Dynamics, University of Bergen, Norway
Professor of Economics, Virginia Western Community College, United States
Professor of Economic Dynamics, National University of Kyiv-Mohyla Academy, Ukraine
Retired Professor, Financial Economics, ISM University of Management & Economics, Lithuania
Professor Wheat studies economic systems. His research specialty is simulation modeling of macroeconomic structure, behavior,
and policy. He is particularly interested in the economies of Ukraine, the Euro Area, and the United States.
He teaches macroeconomic dynamics and policy to graduate students in Norway and Ukraine, and to undergraduates in the
United States. In Norway, he taught the system dynamics modeling process for many years, as well as a course in policy design
& implementation. In Lithuania, he taught monetary policy for many years. His research projects include collaboration with
Ukrainian economists to build dynamic modeling capacity at national universities in Kyiv and Lviv, a system dynamics version of
the central bank’s monetary policy model, and an economic recovery policy model for post-war Ukraine. He also worked with
economists at Lithuania’s central bank to develop a multi-industry system dynamics model of price dynamics in Europe.
For more than twenty years, his system dynamics-based
MacroLab
model has been used by macroeconomics students in the
United States. That model is available online, and students can use it without special software. He is currently writing a textbook
to supplement student use of
MacroLab.
His latest economics journal article is Teaching Endogenous Money with Systems
Thinking and Simulation Tools, and the most recent conference paper was Limits to Entrepreneurial Growth: Impact on Firm
Demographics and Employment. He is co-editor of
Feedback Dynamics
(Springer 2021), which includes ‘Get Started with Macro
Modeling’ (with M. Oliskevych and A. Novik).
Wheat is past-president of the economics chapter of the International System Dynamics Society. He served as Associate Editor of
the System Dynamics Review and on the Advisory Board of the International Journal of Pluralism and Economics Education. He
has given guest lectures in more than twenty countries. For three decades, he was president of Wheat Resources Inc, a
consulting firm serving business and government clients. His current firm, Praktika LLC, specializes in coaching others to build
useful models (https://www.usefulmodels.net). He received his PhD in system dynamics at the University of Bergen, his master’s
degree in public policy at Harvard University, and his bachelor’s degree in government and mathematics at Texas Tech
University. During the 1970s, he served at the White House as staff assistant to the President of the United States.
In a previous life, he and his young family lived in the Blue Ridge Mountains of Virginia, where they built a barn and raised goats
and chickens, and he was Coach of the Year twice after winning back-to-back state championships in high school girls’ basketball.
Recently, after two decades in Norway, he and his wife returned to Virginia and settled in Charlottesville, near Washington, D.C.
He still works in Europe about two months each year.
7
MacroLab Lite is a simplified macroeconomic modeling tool designed to introduce students to system dynamics. Developed by Professor David Wheat, this tool focuses on basic equations and key structural elements of supply and demand sides. It emphasizes simplicity while covering important economic factors such as population growth, labor force participation, and total debt. The current version includes a well-developed supply side and a highly aggregated demand side, with plans for future upgrades to include more sub-models. Students can explore economic scenarios and analyze simulation results using MacroLab Lite.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
MacroLab Lite for Introductory Macroeconomics I. David Wheat, PhD, MPP Professor Emeritus, University of Bergen david.wheat@uib.no 41stInternational System Dynamics Conference Chicago, July 25, 2023 Professor, Economic Dynamics National University of Kyiv-Mohyla Academy, Ukraine Professor, Economics Virginia Western Community College, USA System Dynamics Group
MacroLab Lite: a Work in Progress Motivation: recover original motivation to study system dynamics & build MacroLab. Over time, MacroLab grew like topsy used for advanced instruction & policy analysis detailed structure (financial structure, multiple industries, multiple households) It s time to put a macro model back in the hands of young students. Emphasis on simple equations, with just a few basic SD structures applied throughout. Current version of MacroLab Lite Well-developed Supply Side and a highly aggregated Demand Side. Almost entirely endogenous. Only exogenous inputs: - SS: growth rates of the civilian adult population & labor force participation - DS growth rate in total debt, both private and public. Next upgrades: more sub-models Financial sector -- including monetary policy. Households, Firms, Government, and the Rest-of-the-World. 2 david.wheat@uib.no https://www.usefulmodels.net
Overview of MacroLab Lite Demand Side Supply Side 3 david.wheat@uib.no https://www.usefulmodels.net
Simulation Results with Exogenous Growth in Debt dark curve: constant growth rate light curve: fluctuating growth rate 4 david.wheat@uib.no https://www.usefulmodels.net
Simulation Results with Exogenous Growth in Debt fluctuating growth rate UR % debt Inflation unemployment rate real GDP growth rate real AD growth rate _______ 5 david.wheat@uib.no https://www.usefulmodels.net
Online Version of MacroLab Lite https://exchange.iseesystems.com/public/david-wheat/litesdc 6 david.wheat@uib.no https://www.usefulmodels.net
Production & Sales (PS) Sub-Model dwheat@usefulmodels.net ECO201 2023 7
Labor & Capital (LC) Sub-Model Capital Unemployment Rate & Employment Rate Employed Labor & Productivity dwheat@usefulmodels.net ECO201 2023
Capital Sector within LC Sub-Model from PS production capacity dwheat@usefulmodels.net ECO201 2023 9
Employment & Productivity Sector within LC Sub-Model dwheat@usefulmodels.net ECO201 2023 10
Unemployment Rate & Employment Rate within LC Sub- Model dwheat@usefulmodels.net ECO201 2023 11
Wage & Price (WP) Sub-Model dwheat@usefulmodels.net ECO201 2023 12
Highly Aggregated Demand Side dwheat@usefulmodels.net ECO201 2023 13
I. David Wheat Emeritus Professor of System Dynamics, University of Bergen, Norway Professor of Economics, Virginia Western Community College, United States Professor of Economic Dynamics, National University of Kyiv-Mohyla Academy, Ukraine Retired Professor, Financial Economics, ISM University of Management & Economics, Lithuania Professor Wheat studies economic systems. His research specialty is simulation modeling of macroeconomic structure, behavior, and policy. He is particularly interested in the economies of Ukraine, the Euro Area, and the United States. He teaches macroeconomic dynamics and policy to graduate students in Norway and Ukraine, and to undergraduates in the United States. In Norway, he taught the system dynamics modeling process for many years, as well as a course in policy design & implementation. In Lithuania, he taught monetary policy for many years. His research projects include collaboration with Ukrainian economists to build dynamic modeling capacity at national universities in Kyiv and Lviv, a system dynamics version of the central bank s monetary policy model, and an economic recovery policy model for post-war Ukraine. He also worked with economists at Lithuania s central bank to develop a multi-industry system dynamics model of price dynamics in Europe. For more than twenty years, his system dynamics-based MacroLab model has been used by macroeconomics students in the United States. That model is available online, and students can use it without special software. He is currently writing a textbook to supplement student use of MacroLab. His latest economics journal article is Teaching Endogenous Money with Systems Thinking and Simulation Tools, and the most recent conference paper was Limits to Entrepreneurial Growth: Impact on Firm Demographics and Employment. He is co-editor of Feedback Dynamics (Springer 2021), which includes Get Started with Macro Modeling (with M. Oliskevych and A. Novik). Wheat is past-president of the economics chapter of the International System Dynamics Society. He served as Associate Editor of the System Dynamics Review and on the Advisory Board of the International Journal of Pluralism and Economics Education. He has given guest lectures in more than twenty countries. For three decades, he was president of Wheat Resources Inc, a consulting firm serving business and government clients. His current firm, Praktika LLC, specializes in coaching others to build useful models (https://www.usefulmodels.net). He received his PhD in system dynamics at the University of Bergen, his master s degree in public policy at Harvard University, and his bachelor s degree in government and mathematics at Texas Tech University. During the 1970s, he served at the White House as staff assistant to the President of the United States. In a previous life, he and his young family lived in the Blue Ridge Mountains of Virginia, where they built a barn and raised goats and chickens, and he was Coach of the Year twice after winning back-to-back state championships in high school girls basketball. Recently, after two decades in Norway, he and his wife returned to Virginia and settled in Charlottesville, near Washington, D.C. He still works in Europe about two months each year. 14 david.wheat@uib.no https://www.usefulmodels.net
