Journal on Policy and Complex Systems
were behaviorally incentivized by competition with other lenders promising high rates of return , the potential for extraordinary personal gain , and the belief that housing prices would always rise ( Financial Crisis Inquiry Commission , 2011 , p . 6 ). Perhaps they assumed that the government would bail them out if need be , or that they could move in or out of the market as needed . In any case , the risk models were poor matches for reality .
2.2 . Debate about Limits To Growth
Details of model-based analysis seldom receive public attention , but a tumult followed publication of The Limits of Growth in the early 1970s ( Meadows , Meadows , Randers , & Behrens III , 1972 ). The authors were associates of MIT professor Jay Forrester , the father of the method called System Dynamics . The book warned of civilizational collapse due to environmental and economic issues if business-as-usual trends continued . Criticisms were strenuous ( Cole , Freeman , Jahoda , & Pavitt , 1973 ), with Forrester responding vigorously ( Forrester , Low , & Mass , 1974 ). Later exchanges were more restrained ( Nordhaus , 1992 ), but the debate was not always constructive , much less convergent ( Bardi , 2011 ). 2
The study ’ s computer model embodied assertions about demographic , economic , technological , and political processes . Model parameters were treated as uncertain , but not so much the models themselves . 3 The model assumed exponential growth of population , although not in the naive way assumed by critics . Arguably , the model did not adequately allow for revolutionary changes in technology , energy production , agriculture , or birth rates ( Kahn , 1983 ). For example , the authors did not fully anticipate the drastic changes that were to occur involving solar energy , tertiary recovery , and use of natural gas . Arguably , their model did not allow market forces to respond adequately as resource scarcity grew . Nor did it anticipate that worldwide energy production would increase less than proportionally to economic growth ( Business Council for Sustainable Energy , 2017 ). The model also did not distinguish well among different regions and climates . The authors were sometimes seen as extreme advocates for environmentalism and slow growth .
For years , the conventional wisdom was that the Limits to Growth work had been discredited . In reality , it had had much to say that was important and usefully provocative . Moreover , several researchers have found remarkable agreement between empirical reality over time and many of the model ' s predictions ( Bardi , 2011 ; Turner , 2008 ). Other authors have remarked on analogies between the debate about Limits to Growth and the more recent debate
2 Meadows ( 2012 ) noted the primary criticisms in a 40-year retrospective .
3 Some model uncertainties could be studied by varying model parameters jointly ( Cole et al ., 1973 , p . 223 ; Forrester et al ., 1974 ), but how to so was not intuitive to critics unaccustomed to system dynamic models . For example , the net population growth rate seemed like an input assumption , but was actually an output influenced by multiple factors .
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