ABSTRACT
Chapter 4 provides a review of economic theory over the last 250 years, and the economic modelling methods in the last century, that have been used to develop global policy that underpins growth. In this review, the Limits to Growth work and system dynamics are placed alongside Econometrics, Input-Output analysis, General Equilibrium, Integrated Assessment modelling, Agent-Based modelling, and Complex Networks. We describe how various modellers provided the analytical and theoretical foundation to recognise when a system dynamics model can overlap with various schools of economic thought. In this book we argue that when a system dynamics model is built for the purpose of economic policy, it is important to define the boundaries of the model in terms of the economic school that informs its assumptions to avoid a misinterpretation of results. Thus, further elucidation on the approach of complex system science in support of policy making is provided, and the methodology in use for the development of the Economic Risk, Resources and Environment (ERRE) model is introduced.
