System Dynamics is a continuous-time simulation paradigm developed by Jay Forrester at MIT in the 1950s. It represents a system as a network of stocks (accumulations) and flows (rates of change), connected by feedback loops that reinforce or balance each other. The model’s behaviour emerges from the interaction of these loops, not from individual events or actors.
Unlike Discrete-Event Simulation (DES), which advances time one event at a time, System Dynamics advances time continuously by integrating a system of differential equations derived from the stock-flow structure. It suits problems where the interesting behaviour comes from feedback and delays rather than from individuals, such as population dynamics, supply chains, epidemics, and macro-economic policy. The best-known application is the Limits to Growth model commissioned by the Club of Rome in 1972.