A system dynamics translation of the phillips machine

In 1949, A. W. H. (Bill) Phillips and Walter Newlyn designed and built an electro-hydraulic dynamic model of the macroeconomy of a country. It was the first analog computer to solve the nonlinear coupled differential equations of mid-twentieth century economic theory and led to the use of control theory to study stabilization issues in macroeconomics. Representing money with water, the Phillips machine presented stocks and flows, feedback among variables, exogenous versus endogenous variables and dynamic system behavior in a fluid display of engineering genius. Later known as the “Phillips machine,” the “Newlyn-Phillips machine,” or the “MONIAC,” the device became a mainstay of classroom instruction at the London School of Economics for more than 15 years and at Leeds University for more than 20 years. This chapter explores design details of the machine, includes a mapping of the physical components of the machine to system dynamics notation and provides equations for a system dynamics simulator of the Phillips machine. Several simulation experiments with the simulator are presented, drawn from Phillips’ own instruction manual for the machine. Finally, some concluding comments are provided discussing the place of the Phillips machine in the development of the system dynamics discipline and some future research opportunities.