Is Economic Fluctuation Inevitable?-A simulation study from a supply chain perspective

In this model, each economic agent is assumed to have a simple behavior of trying to increase its inventory when it believes it's in economic boom or reduce its inventory if it believes it's in economic distress. Simulation results show that in most cases, the overall economy fluctuates. If an agent's stockpiling behavior is more dramatic, the economy fluctuates more; all other things equal, if the supply chain is longer, it fluctuates more frequently. The results also show that if the agents try to keep normal business in economic distress, the economy is stable and the economic activity is expected to be very high. When the agents' stockpiling behavior is random across the supply chain, if the supply chain is at 10 or 15 stages long, the overall economy fluctuates in a high level; if the supply chain is 5 stages long, it shows a different pattern of fluctuation which starts from a period of long term growth.