Abstract:

The present paper proposes a cybernetic approach to economic systems and its purpose is to develop new methods for macroeconomic modeling. In this attempt we have built in STELLA – Modeling and Simulation Software a dynamic Keynesian model of a three sector economy. The stock-flow dynamic modeling allows empirical analysis of the system’s states offering insight on its endogenous characteristics and behavior over time. This type of modeling also permits sensitivity analysis to exogenous stimuli, which turns out to be a must in developing functioning economic governance policies. The structure of the model and its simulations sustain the rationality and validity of our purpose.