Lean Thinking

Lean Thinking

Posts 1-3 of 3
  • Ralf Lippold
    Ralf Lippold    Premium Member   Group moderator
    The company name is only visible to registered members.
    Jay W. Forrester (founder of the field System Dynamics) writes about the current crisis...
    "First, the current crisis did not start with the burst housing
    bubble. It started with the excessive credit that led to the
    housing bubble. That excess credit resulted from the Federal
    Reserve holding down interest rates to less than the inflation rate
    in housing. This negative real interest rate (bank interest minus
    inflation in the housing assets) produced a powerful incentive for
    investment and speculation in housing. And the action of the
    Federal Reserve, with the increase in risk taking by banks, were a
    result of pressure from Congress and the public who were all
    enjoying the short-term rise in housing prices.

    We see here one of the characteristics of a complex social system in
    which a policy that is good in the short run is almost always bad in
    the long run. Feeding the bubble with easy credit was popular in
    the short run but now we have the consequent day of reckoning with
    the collapse of the financial system.

    There are a number of papers on this matter in the "System Dynamics
    Group Literature Collection" DVD available at:
    http://systemdynamics.org/MITCollectionDVDinfo.htm

    Look for the papers on the National Model. The model itself is not
    there, it has not yet been released, but there are many interesting
    discussions and computer runs on the economic long wave (also known
    as the Kondatrieff Wave), which I believe explain the Great
    Depression of the 1930s and the economic turmoil at the present
    time. Given the extreme degree of government financing that is now
    in process, the outcome may this time be different from the 1930s."

    Posted by Jay Forrester <jforestr@MIT.EDU>
    posting date Wed, 15 Oct 2008 19:09:42 -0400
    _______________________________________________
    • 16 Oct 2008, 3:20 pm
  • Gerold Keefer
    Gerold Keefer    Premium Member
    The company name is only visible to registered members.
    Re: Jay W. Forrester (founder of the field System Dynamics) writes about the current crisis...
    ... nicht unbedingt weil es zutrifft, sondern weil es so schoen passt:

    Ralf Lippold schrieb:
    ...
    time. Given the extreme degree of government financing that is now
    in process, the outcome may this time be different from the 1930s."
    The four most expensive words in the English language are "this time it’s different."

    John Marks Templeton 29 November 1912 - 8 July 2008

    Posted by Jay Forrester <jforestr@MIT.EDU>
    posting date Wed, 15 Oct 2008 19:09:42 -0400
    _______________________________________________
    • 18 Oct 2008, 3:18 pm
  • Ralf Lippold
    Ralf Lippold    Premium Member   Group moderator
    The company name is only visible to registered members.
    Re^2: Jay W. Forrester (founder of the field System Dynamics) writes about the current crisis...
    Hi Gerold,

    Thanks for the short comment (really lean;-)).

    The events are different (that's for sure;-) and the behavior that leads to it the seen data in forms of events will be the same as the structure (underlying the system).

    What holds us back to question the structure in order to understand the root causes?

    Best

    Ralf

    PS.: Sometimes I have the strong feeling that strong events trigger merely focusing on the tools without thoroughly getting to understand what really is going on - which we as LEAN THINKER are focused on all the time we sense and see strange events/data:-) (despite what the boss is telling you!)
    • 18 Oct 2008, 10:11 pm