 example, I want you to read it and start modeling in a fresh neat page. So, just go over it and try to come up with a causal loop diagram for this one. Make it a neat page so that I can, if it works I can show it in this. As employment opportunities increase in a city people are attracted into the urban area. However, in migration do not immediately react to opportunities. Since migrants react to perceived opportunities there may be 5 to 10 year lag in response. Population growth from the influx of migrants tends to encourage business expansion in the growing urban area. This business expansion creates demand for additional labour which increases employment opportunities. So, try to identify some of these noun phrases. We may begin with the second point and then move on to the first point. It is not written in very sequential nice manner. It goes back and forth the narration. Some of the variables you can look at are employment opportunities, population, in migration and there are a couple of more you can think on that. What are the names of the variables? Employment opportunities one what else? Nouns, in migration, yes population, no growth, only population, yes growth is an action, business expansion, anything else? Demand for labour. So, we have the employment opportunities, business expansion, in migration, population or overall population. We can have a perceived condition also. We can have it, we do not change. What loop will it be? All links are, is there any negative links here? Anybody got negative links? Immigration too? There is nothing in description about that part. It is an assumption you have made. With a 5 to 10 year lag in response, there is also a negative thing. It reacts in the positive direction, the same direction, but there is a delay there. It is a perception delay. It cannot be captured here, but that will all be short term. So, we do not need that link in this description. That is a previous example. If you got that, you can check your answers. What you have is a positive feedback system. All variables are mutually enhancing. So, employment opportunities increase, the immigration also increases, but it happens after a lag is indicated by this delay. So, it can be a, what can I say, a perception delay. After the perception delay, the immigration increases. As immigration increases, the population of that region itself increases. As population increases, more business opportunities and business expansion takes place, where it is small shops or big factories, whatever business expansion happen. As business expansion happen, more demand for labour gets created and more demand for labour gets created, more employment opportunities come about and it keeps enhancing itself. So, this is a kind of, what can you say, an ideal perceptions of how businesses can grow. But we know that typically it does not happen. During the growth phase of any new place, like 70s, 80s, Bombay was the place to go. I guess there are many, many industrial towns which has boomed because of this, where initially set up facilities and then people start to, you see that enormous amount of employment opportunities there and people start migrating to that place and that is going to increase the population there, more businesses will start booming, it will create additional demand for labour. So, it will be really nice and smooth for quite some time, 10 years, 15, 20, 30 years. But then eventually, problem will start kicking in because there will be some limitations in the resource. Many such resources is going to take a hit. So, one common resource which is non-negotiable is, for example, you can consider land. Like in Mumbai city, it is an island, where it was made up of seven islands. It is all mixed into one single big island. So, land is fixed. There is nothing to negotiate from. So, that is the total amount of land that we have. So, you can keep expanding until you are going to hit that particular resource, which we can expect will start to influence this positive growth. It will act as a limiting factor for that positive growth. So, let us consider one such scenario for land. So, let us say there is a couple of ways to write or we can have employment opportunities then have perceived employment opportunities, which then leads to in migration and the delay will be become employable opportunities and the perceived employment opportunities. Meaning, even if today employment opportunity stops, people will start still, will still come to the city because they have a perception that if I come there, I will get a job. Even if there is no opportunities, people still come. Only after a few years the message goes that it is very difficult to get jobs here. So, then slowly immigration will lessen. If that all happens, with this narration it is not visible or fully known here. Let us take just one simple resource and we will try to model that. This is slide number 2. Now, let us look at one resource constraints, how it affects. Population growth also tends to drive the housing construction, say at a greater pace to match the population. Assuming only a fixed land is available for business and housing, I can only use it for two. Either I do houses or I do factory land, say businesses. An increasing housing stock makes less land available for business expansion. As unavailability of more land begin to surplus business expansion area, the demand for labour decreases. Consequently, local employment opportunities decline. Once potential migrants perceive the lack of opportunities, declining immigration generates a reduction in the population growth of the area. So, we can, for second part we do not actually need to model the first one. For example, population growth tends to drive the housing construction. That means housing stock increases as number of houses available increases, which reduces the land for business expansion, which again affects the business expansion. And let me just draw that. And so, both try to read it once more. Population growth also tends to drive the housing construction at a greater pace. Fixed land is available for business housing, increasing housing stock. Certainly business has more housing construction happened, housing stock increases. As housing stock increases, less land is available for business, which is opposite direction. As less land is available for business, business expansion slows down. Again same direction. So, we are going to put positive signs for the last one. So, let me just attempt this. So, population increase in population drives housing construction. Housing construction increases, housing stock, currently narration does not have delays, but we can imagine housing stock as increase becomes less land for business expansion, less land for business expansion. Land for business expansion decreases, which will further decrease the business expansion. So, when we read the loop, so we have two loops. One loop which goes from population goes around like this. On the second loop, charts population goes like this, that is the bigger loop. So, when we read it as population increases, housing construction increases, results in more number of housing stock which reduces the land for business expansion. As less land for business expansion means less business expansion. As business expansion falls down, demand for labour falls down. As demand for labour falls down, employment opportunities fall down. As employment opportunities fall down after the lag or after the perception of employment opportunities falls down and as a perceived employment opportunities fall down, immigration reduces which eventually saturates the population in the region to where we want. So, this outer bigger loop becomes your limiting factor for your resources. So, this is a very simple model, but can be used elegantly to understand what is happening. For example, as population consider Mumbai, initially we had it expanded up to a point and then as more population, more housing, there is less land for business, but we do not want this to slow down. So, the government has to somehow create more land or create more opportunities. So, what do you do? You increase the FSI, floor space index. So, then you are actually just increasing the land usage. You denotify or change the areas, change the housing regulations, change the land use pattern from coastal to which is marked for parks and forest areas versus marsh lands etcetera. All you are trying to do is play around with this loop meaning you are just pushing the boundary. At some point it has to become a constrained, it has to have its limits. So, these can help in understanding where all we need to, what can you say, target our interventions better by just mapping out all the variables in a clear and nice fashion. It is an addition of new businesses. So, we wrote it. So, you can, what you are saying this is not needed. We do not need business expansion. You can leave it. Questions on this? I have a slightly interesting example for 10 minutes. So, yeah. I mean I think we are kind of, kind of I need to do some couple of admin thing. That is a big kind of case study. We will go over it case study in the next class.