Dynastic Cycle: A Generic Structure Describing Resource Allocation in Political Economies, Markets and Firms

Abstract:     
A generic system embodies basic principles and insights that are common to a set of diverse cases and situations. For example, a generic system called "limits to growth" captures the constraints experienced by an organization due to the scarcity of an important resource. Its manifestations range from the tragedy of Easter Island to the spotty performance of early peer-to-peer music networks. This paper presents a new generic system that we name the dynastic cycle structure. It is based on a stylized model of events from the Chinese history. It describes resource allocation between social, asocial and control uses in a variety of institutions, including political economies, markets and firms that experience cyclical behavior and homeostasis symbolizing low levels of performance. Numerical simulations with the model are used to test several policy scenarios.

Keywords: system dynamics, political economy, dynastic cycle, systems, simulation

Accepted Paper Series