This book explores the dynamic processes in economic systems, concentrating on the extraction and use of the natural resources required to meet economic needs. Sections cover methods for dynamic modeling in economics, microeconomic models of firms, modeling optimal use of both nonrenewable and renewable resources, and chaos in economic models. This book does not require a substantial background in mathematics or computer science.

Its models created using STELLA software, this new edition has been updated to facilitate student access. It explores the dynamic processes in economic systems and concentrates on natural resource extraction, covering everything from chaos to microeconomics.

New feature

Economists model the ways in which humans meet their needs using given endowments of resources and technologies.? This book explores the dynamic processes in economic systems, concentrating on the extraction of resources that are required to meet economic needs.

Using the STELLA^® software, Modeling Dynamic Economic Systems applies methods of computer modeling to a wide range of real-world economic phenomena, demonstrating how to make informed decisions about economic performance and environmental quality. ?Sections of the book cover: methods for dynamic modeling economics with special emphasis on the microeconomic models of firms, modeling optimal use of both nonrenewable and renewable resources, and chaos in economic models.?

The book does not require a substantial background in mathematics or computer science and encourages all students and scholars to actively incorporate modeling into their education and research.? A save-disabled version of STELLA and the computer models of this book are available at www.iseesystems.com/modelingeconomicsystems.

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About the Authors

Matthias Ruth is Roy F. Weston Chair in Natural Economics at the University of Maryland, College Park.

Bruce Hannon is Jubilee Professor (Emeritus) of Liberal Arts and Sciences at the University of Illinois, Urbana-Champaign.

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About the Series

The availability of powerful, intuitive software for developing and running computer models of real-world phenomena promises a revolution in studying, teaching and thinking about complex problems that range from the functioning of a cell to that of an ecosystem to that of a national economy.? The books in the series Modeling Dynamic Systems promote the spread of “systems thinking” by integrating state-of-the-art modeling techniques with the theories and concepts of specific disciplines or interdisciplinary topics.? The unifying theme of the series is the ease, power, and transparency of model building.

Foreword Preface Notation Part I: Introduction 1. Modeling Dynamic Systems 2. Disaggregation of Stocks Part II: Methods for Dynamic Modeling 3. System Boundaries in Space and Time 4. Scheduling Flows 5. Positive Feedback in the Economy 6. Derivatives and Lags Part III: Microeconomic Models of Firms 7. Introduction to Modeling Economic Processes 8. Substitution of Inputs in Production 9. Time Value.- Opportunity Cost 10. The Profit-Maximizing Competitive Firm 11. The Profit-Maximizing Monopoly 12. Monopolistic Collusion 13. Quasi-Competitive Equilibrium 14. Modeling Economic Games Part IV: Modeling Optimal Use of Nonrenewable Resources 15. Competitive Scarcity 16. Competitive Scarcity with Substitution 17. Competitive Scarcity with Cost Dependent on Production Rate and Resource Size 18. Competitive Scarcity with Technical Change 19. Competitive Scarcity with Exploration 20. Monopoly Scarcity 21. Monopoly Scarcity with Variable Interest Rate 22. Monopoly Scarcity with Cost Dependent on Production Rate and Resource Size Part V: Modeling Optimal Use of Renewable Resources 23. Optimal Timber Harvest 24. Managing Open Access Resources 25. Optimal Harvest from Fisheries 26. Spatial Fishery Model Part VI: Chaos in Economic Models 27. Preference Cycles and Chaos 28. Nonmonotonic Demand and Supply Curves 29. Price Expectation and Production Lags 30. Chaos in Macroeconomic Models Part VII: Conclusion 31. Building a Modeling Community References Index