Skip to main content
SpringerLink
Log in

Visualisations for Understanding Complex Economic Systems

  • Chapter
  • First Online:
Ways of Thinking, Ways of Seeing

Part of the book series: Automation, Collaboration, & E-Services ((ACES,volume 1))

Abstract

In the history of economics, a few (but famous) analogue systems were built with the purpose of gaining a better understanding of an economics mechanism by creating a visualisation of it. One of the first was Irving Fisher’s mechanism, constructed in 1893, consisting of a tank with floating cisterns connected by sticks visualising a three-good, three consumer economy. More famous and better-known is the Phillips-Newlyn Hydraulic Machine, built in 1949, representing macroeconomics by flows and stocks of coloured water in a system of Perspex tanks and channels. This hydraulic machine became a reference point for developing other less fragile systems to visualise an economic mechanism, namely by simulations run on a computer. The main part of this chapter will discuss FYSIOEN, a computer visualisation of a hydraulic system representing the macro-econometric model MORKMON of the Dutch Central Bank, designed in 1988. FYSIOEN was developed to help users gain understanding of the complex mathematical model by translating it into the visual domain. An analogy usually transfers a familiar mechanism to an unfamiliar domain in order to provide an understanding of the latter. So, in case of the analogues of Fisher, and Phillips and Newlyn, the more familiar hydraulic laws were used to attain understanding of an economic mechanism. The problem with FYSIOEN, however, was that although it was an animation of a hydraulic system, the program was not run by hydraulic laws but by the relationships used in MORKMON. Several improvements were suggested to make the animation look more real to compensate for the lack of hydraulic laws, but computing facilities at the time limited the possibilities.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Albers, J.: Scoor met beleid en sleep een virtueel contract binnen! DNB Magazine 3, 18–19 (2006)

    Google Scholar 

  • Ashby, W.R.: An introduction to cybernetics. Chapman and Hall, London (1956)

    MATH  Google Scholar 

  • Berkeley, E.C., Wainwright, L.: Computers their operation and applications. Reinhold Publishing Corporation, Chapman and Hall, New York, London (1956)

    MATH  Google Scholar 

  • Bikker, J.A., Kramer, P.: Overleg te TH Delft op 22 januari. DNB Afdeling Wetenschappelijk onderzoek en econometrie, BI232 (1986)

    Google Scholar 

  • Bissell, C.C.: Historical perspectives – The Moniac A Hydromechanical Analog Computer of the 1950s. IEEE Control Systems Magazine 27(1), 59–64 (2007)

    Google Scholar 

  • Boltzmann, L.: On the methods of theoretical physics. In: McGuinness, B. (ed.) Theoretical Physics and Philosophical Problems, pp. 5–12. Reidel, Dordrecht (1892/1974)

    Google Scholar 

  • Boltzmann, L.: On the development of the methods of theoretical physics. In: McGuinness, B. (ed.) Theoretical Physics and Philosophical Problems, pp. 77–100. Reidel, Dordrecht (1899a/1974)

    Google Scholar 

  • Boltzmann, L.: On the fundamental principles and equations of mechanics. In: McGuinness, B. (ed.) Theoretical Physics and Philosophical Problems, pp. 10–128. Reidel, Dordrecht (1899b/1974)

    Google Scholar 

  • Boltzmann, L.: Model. In: McGuinness, B. (ed.) Theoretical Physics and Philosophical Problems, pp. 213–220. Reidel, Dordrecht (1902a/1974)

    Google Scholar 

  • Boltzmann, L.: On the principles of mechanics. In: McGuinness, B. (ed.) Theoretical Physics and Philosophical Problems, pp. 129–152. Reidel, Dordrecht (1902b/1974)

    Google Scholar 

  • Boltzmann, L.: Anmerkungen. In: Boltzmann, L. (ed.) Faradays Kraftlinien von J.C. Maxwell, pp. 97–128. Engelmann, Leipzig (1912)

    Google Scholar 

  • De Regt, H.W.: Ludwig Boltzmann’s Bildtheorie and scientific understanding. Synthese 119(1/2), 113–134 (1999)

    Article  Google Scholar 

  • De Regt, H.W.: Understanding and scientific explanation. In: de Regt, H.W., Leonelli, S., Eigner, K. (eds.) Scientific Understanding, pp. 21–42. University of Pittsburgh Press, Pittsburgh (2009)

    Google Scholar 

  • Dingemanse, L.J.: MORKMON-Visualisatie. Onderzoek naar de visualisatiemogelijkheden van het macro-ekonomisch model MORKMON. TU Delft, Afdeling Elektrotechniek nr. A 87.013 (1987)

    Google Scholar 

  • Duhem, P.: The aim and structure of physical theory, translated by P.P. Wiener. Princeton University Press, Princeton (1954)

    Google Scholar 

  • Enke, S.: Equilibrium among spatially separated markets: Solution by electric analogue. Econometrica 19(1), 40–47 (1951)

    Article  MATH  Google Scholar 

  • Fisher, I.: Mathematical investigations in the theory of value and prices. Yale University Press, New Haven (1892/1925)

    Google Scholar 

  • Fisher, I.: The purchasing power of money, 2nd revised edn. Kelley, New York (1911/1963)

    Google Scholar 

  • Fisher, I.: A three-dimensional representation of the factors of production and their remuneration, marginally and residually. Econometrica 7(4), 304–311 (1939)

    Article  Google Scholar 

  • Goodwin, R.M.: The nonlinear accelerator and the persistence of business cycles. Econometrica 19(1), 1–17 (1951)

    Article  MathSciNet  MATH  Google Scholar 

  • Hertz, H.: The principles of mechanics presented in a new form. Dover, New York (1899/1956)

    Google Scholar 

  • Kalecki, M.: A macrodynamic theory of business cycles. Econometrica 3(3), 327–344 (1935)

    Article  Google Scholar 

  • Keynes, J.M.: The general theory of employment, interest and money. Macmillan, London (1936)

    Google Scholar 

  • Kramer, P.: FYSIOEN, een demonstratiemodel van de Nederlandse economie. DNB Afdeling Wetenschappelijk Onderzoek en Econometrie 8620 (1986)

    Google Scholar 

  • Kramer, P., Bikker, J.A.: Stylering MORKMON. DNB Afdeling Wetenschappelijk Onderzoek en Econometrie, KR 151 (1986a)

    Google Scholar 

  • Kramer, P., Bikker, J.A.: Stylering MORKMON (= MINIMORKMON). DNB Afdeling Wetenschappelijk Onderzoek en Econometrie, KR 159 (1986b)

    Google Scholar 

  • Kramer, P., Coenen, R.L.: Werkprogramma ontwerp fysiek model MORKMON. DNB Afdeling Wetenschappelijk Onderzoek en Econometrie, KR 122 (1985a)

    Google Scholar 

  • Kramer, P., Coenen, R.L.: Voortgang ‘Fysiek model MORKMON’. DNB Afdeling Wetenschappelijk Onderzoek en Econometrie, KR 125 (1985b)

    Google Scholar 

  • Kramer, P., van den Bosch, P.P.J., Mourik, T.J., Fase, M.M.G., van Nauta Lemke, H.R.: FYSIOEN. Macro-Economie in Computerbeelden. Kluwer, Deventer (1988)

    Google Scholar 

  • Kramer, P., van den Bosch, P.P.J., Mourik, T.J., Fase, M.M.G., van Nauta Lemke, H.R.: FYSIOEN: Macroeconomics in computer graphics. Economic Modelling 7, 148–160 (1990)

    Article  Google Scholar 

  • Machamer, P.: Galileo’s machines, his mathematics, and his experiments. In: Machamer, P. (ed.) The Cambridge Companion to Galileo, pp. 53–79. Cambridge University Press, Cambridge (1998)

    Chapter  Google Scholar 

  • Machamer, P., Woody, A.: A model of intelligibility in science: using Galileo’s balance as a model for understanding the motion of bodies. Science and Education 3, 215–244 (1994)

    Article  Google Scholar 

  • Maxwell, J.C.: On Faraday’s lines of force. In: Niven, W.D. (ed.) The Scientific Papers of James Clerk Maxwell, vol. I, pp. 155–229. Dover, New York (1855/1965)

    Google Scholar 

  • Maxwell, J.C.: On the mathematical classification of physical quantities. In: Niven, W.D. (ed.) The Scientific Papers of James Clerk Maxwell, vol. II, pp. 257–266. Dover, New York (1871/1965)

    Google Scholar 

  • Morehouse, N.F., Strotz, R.H., Horwitz, S.J.: An electro-analog method for investigating problems in economic dynamics: Inventory oscillations. Econometrica 18(4), 313–328 (1950)

    Article  MathSciNet  Google Scholar 

  • Morgan, M.S., Boumans, M.: Secrets hidden by two-dimensionality: The economy as a hydraulic machine. In: de Chadarevian, S., Hopwood, N. (eds.) Models: The Third Dimension of Science, pp. 369–401. Stanford University Press, Stanford (2004)

    Google Scholar 

  • Morrison, M., Morgan, M.S.: Models as mediating instruments. In: Morgan, M.S., Morrison, M. (eds.) Models as Mediators, pp. 10–37. Cambridge University Press, Cambridge (1999)

    Chapter  Google Scholar 

  • Mosselman, J.F.: Een interactief programma voor simulaties met MORKMON-deelmodellen. TU Delft, Faculteit der Elektrotechniek A 87.070 (1987)

    Google Scholar 

  • Nagel, E.: The Structure of Science: Problems in the Logic of Scientific Explanation. Routledge and Kegan Paul, London (1961)

    Google Scholar 

  • Oxford English Dictionary. Clarendon Press, Oxford (1933)

    Google Scholar 

  • Phillips, A.W.: Mechanical models in economic dynamics. Economica 17(67), 283–305 (1950)

    Article  Google Scholar 

  • Reus, J.A.: Suggesties ter verbetering van de MORKMON-visualisatie. Vakgroep voor regeltechniek. TU Delft, Faculteit der Elektrotechniek T 87.042 (1987)

    Google Scholar 

  • Rosenblueth, A., Wiener, N.: The role of models in science. Philosophy of Science 12(4), 316–321 (1945)

    Article  Google Scholar 

  • Small, J.S.: General-purpose electronic analog computing: 1945-1965. IEEE Annals of the History of Computing 15(2), 8–18 (1993)

    Article  Google Scholar 

  • Smith, O.J.M.: Economic analogs. Proceedings of the Institute of Radio Engineers 41(10), 1514–1519 (1953)

    Google Scholar 

  • Smith, O.J.M., Erdley, H.F.: An electronic analogue for an economic system. Electrical Engineering 71, 362–366 (1952)

    Google Scholar 

  • Smith, O.J.M., Saunders, R.M.: Discussion. Transactions of the American Institute of Electrical Engineers 70(1), 562–563 (1951)

    Google Scholar 

  • Strotz, R.H., Calvert, J.F., Morehouse, N.F.: Analogue computing techniques applied to economics. Transactions of the American Institute of Electrical Engineers 70(1), 557–562 (1951)

    Article  Google Scholar 

  • Strotz, R.H., McAnulty, J.C., Naines, J.B.: Goodwin’s nonlinear theory of the business cycle: An electric-analogue solution. Econometrica 21(3), 390–411 (1953)

    Article  MATH  Google Scholar 

  • Thomson, W.: Notes of lectures on molecular dynamics and the wave theory of light. In: Kargon, R., Achinstein, P. (eds.) Kelvin’s Baltimore Lectures and Modern Theoretical Physics, pp. 7–255. MIT Press, Cambridge (1884/1987)

    Google Scholar 

  • Tustin, A.: The Mechanism of Economic Systems: An Approach to the Problem of Economic Stabilisation from the Point of View of Control-System Engineering. William Heinemann, London (1953)

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. University of Amsterdam, Amsterdam, The Netherlands

    Marcel Boumans

Authors
  1. Marcel Boumans
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. , Faculty of Mathematics, Computing and, The Open University, Walton Hall, Milton Keynes, MK7 6AA, United Kingdom

    Chris Bissell

  2. , Faculty of Mathematics, Computing and, The Open University, Walton Hall, Milton Keynes, MK7 6AA, United Kingdom

    Chris Dillon

Rights and permissions

Reprints and permissions

Copyright information

© 2012 Springer-Verlag GmbH Berlin Heidelberg

About this chapter

Cite this chapter

Boumans, M. (2012). Visualisations for Understanding Complex Economic Systems. In: Bissell, C., Dillon, C. (eds) Ways of Thinking, Ways of Seeing. Automation, Collaboration, & E-Services, vol 1. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-25209-9_7

Download citation

  • DOI: https://doi.org/10.1007/978-3-642-25209-9_7

  • Published:

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-25208-2

  • Online ISBN: 978-3-642-25209-9

  • eBook Packages: EngineeringEngineering (R0)

Publish with us

Policies and ethics

Search

Navigation