Chapter 7. Causal Loop Diagrams

System dynamics helps us to analyze complex systems with special emphasis on the role of information feedback. This chapter describes causal loop diagrams, a technique to portray the information feedback at work in a system. The word causal refers to cause and effect relationships. The word loop refers to a closed chain of cause and effect. Let's begin with some simple examples. Then we'll discuss guidelines for drawing the diagrams.

Examples

Two flow diagrams from Chapter 2 are shown in Figure 7.1. They portray the accumulation of money in a bank balance stock and the accumulation of people in a human population stock. The causal loop diagrams are shown immediately below each flow diagram. Think of the new diagrams as simply "word and arrow" diagrams. The words represent the variables in the system; the arrows represent causal connections. The arrows are drawn in a circular manner to draw our eye to the closed chain of cause and effect.

Figure 7.1. Flow diagrams along with the corresponding causal loop diagrams.

The words in a "word and arrow" diagram represent any variable in the system. Regardless of whether the variable is a stock, a flow or a converter, it will appear in the causal loop diagram by name only. The arrows stand for the causal connections between the variables. For example, the arrow from interest added to the bank balance stands for the fact that adding interest builds the balance in the bank account. This arrow is labeled with a + at the tip of the arrow to designate positive polarity. The arrow from the bank balance to the interest added stands for the fact that a higher balance causes more interest to be added in the future. This arrow is also labeled with a + at the tip of the arrow. The important thing to observe is the closed chain of cause and effect -- a larger bank balance leads to higher interest and higher interest leads to a higher bank balance. This is an example of positive feedback. We label positive feedback loops with a (+) in the middle of the loop. The population diagram is similar. It shows a closed chain of cause and effect in which a higher population leads to more births and more births lead to still higher population in the future.