In this project, we try to analyze the relationship between the population density of a region and the local economy, how changes in population density will affect the economy, and in turn how population density will be affected. As can be seen in the two graphs shown below, Beijing’s population has increased over time (2000-2007), and Beijing’s GDP has continued to increase during this time.
According to the idea of the iceberg model, we try to analyze the reasons and patterns of this trend, and whether it may develop in both directions (whether the population decline causes economic recession).We believe that an increase in the population of a region will firstly cause the primary and secondary effects of the economy, which are prosperous business, the increase in companies and industries, respectively. This will improve community conditions and make consumption levels higher. The final manifestation is that the economic level of the entire region has risen. But at this time we thought of a problem: if we follow this reinforcing loop, the economy will grow infinitely, which is not consistent with what we know.Therefore, we are thinking about what causes the economic level of a region to change up and down. In the end, we found a concept in economics called overcapacity. This means that when the resources in a place are far greater than the per capita demand, these consumers do not need others to produce, so it will lead to an increase in unemployment and a series of reasons that will cause the economic level to decline. When the economic level is too low, “capacity scarcity” will occur. Therefore, the demand for production will increase again, and the employment rate will increase. Thus forming a dynamic cycle.
Disadvantages: In this system we only discuss the impact of business, and we do not discuss the cycle of change.