Setting up a mental model to run system dynamics has the following advantages in analyzing policy effects. First, it distinguishes between conditions given exogenously and conditions arising from endogenous operations within the system, thus helping t...
Setting up a mental model to run system dynamics has the following advantages in analyzing policy effects. First, it distinguishes between conditions given exogenously and conditions arising from endogenous operations within the system, thus helping to identify which variables policies can focus on. Second, by distinguishing and utilizing the relationships of more realistic variables, it clarifies the identification problem of individual policies arising from the mix of policy effects that occur in the process of simplifying the system. This allows for clearer comparative analysis of each effect. Of course, the final product is to see what characteristics and relationships each variable has dynamically through simulation. However, this paper focused more on what is needed in the process of obtaining fundamental policy implications rather than introducing and explaining such problems. That is, the correct setting of the mental model using the CLD (Causal Loop Diagram) and SFD (Stock Flow Diagram) should precede the simulation, and for this, prior studies in the modeling field, theoretical studies, and knowledge of practitioners’ practical experiences must be fully equipped. Through this, you can know which of the variables becomes a temporal link, what the relationships and characteristics between the variables should be, and what policy ultimately needs to be identified. Only by verifying this can a feasible simulation model be completed.