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A mismatch between aspirations and reality: why are we letting black swans pass us by? An open question about system dynamics and the financial crisis of 2007-2009 : Version 1.2

  • The financial crisis of 2007-2010 was probably one of the greatest, most lustrous black-swan events that people of our generation(s) will experience – and at its heart, it was a dynamic phenomenon. It is stated in the vision of the System Dynamics Society that we aspire to transform society by influencing decision-making. Yet, it seems as if system dynamics did not play any significant role in this crisis: we did not examine the markets, we did not provide insights to banks, and we did not warn governments or the people. In our presentation we describe the dynamics involved in a housing bubble, and describe what made the last one different. With the insights gained from this exercise we conclude that, from a system dynamics perspective, the dimension of the financial crisis of 2007-2009 was eminently foreseeable, which will lead us to pose the following question: where were we as a field while this crisis was unfolding, why were we not active players? We present a range of potential answers to this question, hoping to provoke some reflection… and maybe some (re)action.

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Author of HS ReutlingenKapmeier, Florian
Erschienen in:34th International Conference of the System Dynamics Society 2016 : Delft, Netherlands, 17-21 July 2016
Publisher:Curran Associates
Place of publication:Red Hook, NY
Document Type:Conference proceeding
Publication year:2016
Tag:commodity products; financial crisis; qualitative system dynamics; real estate markets
Page Number:14
First Page:1
Last Page:14
DDC classes:330 Wirtschaft
Open access?:Nein