System dynamics (proposed by J. W. Forrester of the Massachusetts Institute of Technology) is a technique for breaking down the volatility than occurs in systems over time. It can pinpoint the components that have an effect on the volatility of systems and model the causal relationships between those components. Then, simulations with the models obtained are performed, and the volatility can be analyzed quantitatively. At the time it was proposed, it was known as "industrial dynamics," and its analysis targets were limited to the industrial world. These days, however, it is being applied in a wide range of fields, so it has become known as "system dynamics."
