Causal Loop Diagram: Housing Policy, Fish Bank Model, Traditional Bank Run
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Simple CLD for three simple cases
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Causal Loop Diagram: Housing Policy, Fish Bank Model, Traditional Bank Run
- 1. By : Muhammad Irfan Kemal 2006544430 HOUSING POLICY
- 2. Variable and Constant Identification 1. Real Estate Demand 2. Real Estate Supply 3. Sufficient Land 4. New Construction Project 5. Property Price 1. Area Available VARIABLE CONSTANT
- 3. The List Extention Method 3rd 2nd 1st Sufficient Land Real Estate Demand Real Estate Supply New Construction Project Property Price + + - - - - Area Available +
- 4. THE CAUSAL LOOP DIAGRAM Property Price Real Estate Demand Sufficient Land Real Estate Supply New Construction Project 1 2 Price Sensitivity Supply Demand Effect The Sufficient Land variable might limits company’s next new project - - - - + + Area Available +
- 5. What Kind of Dynamics in Property Prices? Limit to Growth Archetype Form the price sensitivity (B1) loop also the supply and demand (B2) loop where the sufficient land variable as their limit if it reach it’s lowest point. Ex Dynamics: Property Price is high if • Sufficient Land is low (limit), which causes by: • High Supply, which causes by: • High Demand, which firstly caused by: low property price, which priory caused by: • High Sufficient Land (started point) - (following the balancing loop pattern) - What’s the Adequate Strategy for the Company? Internalized the Land Sufficiency as their Limit 1. Support the Government’s policy for the Land sufficient sustainability 2. Study new urbanizes (area available) location for new potential project
- 6. By: Muhammad Irfan Kemal – 2006544430 Traditional bankrun
- 7. Variable Constant 1. Withdraw Personal Savings - 2. Bank’s Fear of Failure 3. Bank’s Precieved Solvency 4. Bank’s Urgent Liqudity Policy 5. Bank’s Losses 6. Bank’s Solvency 7. Uncertain Economic Condition Variableandconstrant identification
- 8. 3rd 2nd 1 st Thelistextentionmethod Withdraw Personal Savings Bank’s Fear of Failure Uncertain Economic Condition Bank’s Precieved Solvency Bank’s Solvency Bank’s Losses Bank’s Urgent Liqudity Policy + - + - + + - + -
- 9. The causalloopdiagram Bank’s Fear of Failure Bank’s Perceived of Solvency Withdraw Personal Savings Uncertain Economic Condition Bank’s Urgent Liquidity Policy Bank’s Losses Bank’s Solvency 1 1 + + + - + - + - - Liquidity Policy Withdraw Policy There are two feedbacks loops that forms “Shifting to Burden” Archetype: • Balancing the Fear (B1) • And Reinforcing the Fear (R1)
- 10. What system behavior suggested by the cld? The Shifting to Burden Archetype The system tend to solve the symptoms, not the problem. Especially at the time when liquidity policy keep being implemented. The Bank need to focus on the fundamental problem that create more stable monetary condition, such as using prediction and creating safety net for losses. Or the unintended consequences (fear) will keep coming
- 12. VARIABLE CONSTANT New Technology - Entrepreneur’s Will to Act Entrepreneur’s Will to Acquire Knowledge Company’s Will to Invest Real Investment Perceived Risk Perceived Certainty Entrepreneur’s Motivation Success Perception Resources VARIABLEANDCONSTANTIDENTIFICATION
- 13. The ListExtentionMethod New Technology 1st 2nd 3rd 4th Entrepreneur’s Will to Acquire Knowledge Entrepreneur’s Will to Act Company’s Will to Invest Real Investment Resources Perceived Certainty Perceived Risk Success Perception Entrepreneur’s Motivation + + + + + + + + + - - + + +
- 14. Property Price THECAUSALLOOPDIAGRAM New Technology Company’s Will to Invest Real Investment Resources Perceived Certainty Entrepreneur’s Will to Acquire Knowledge Perceived Risk Success Perception Entrepreneur’s Motivation Entrepreneur’s Will to Act + + + + + + + + + - - + + + 1 2 3 4 5 Investment on NPD *NPD : New Product Development Knowledge to NPD Act to NPD Investment by Risk Investment by Potential There are five reinforcing loops that depends on Real Investment variable as their primary resource
- 15. WhatPolicyis Recommended? There is a potential of the system experiencing future exponential growth. The government need to sustain the resources availability, so at some point any entrepreneurs don’t have to compete (intensely) on the same resources.