ENTERPRISE STRESS TESTING WITH SYSTEM DYNAMICS: A STATE OF RESEARCH AND CHALLENGES

Abstract

The paper is to analyse opportunities and limitations of making numerical simulations of the behaviour of non-financial enterprises; the examined models are intended to fit the requirements of risk technics like stress testing. This kind of a model needs to be universal and agile in its use for different enterprises of different sizes, and all of this to a sufficient degree since some industries are highly differentiated from the others. The paper will examine these challenges true the scope of system dynamics modelling, however the paper is to examine the right heuristics where this kind of modelling can be done with different approaches. The goal of this paper is differentiated from the conventional approaches in its pursuit to proposing a model that is adapted for the risk technic, not the other way around. The paper will conduct an observation upon an un-investigated and neglected concept in the world of risk management; which is the development of stress testing analysis for the non-financial sector true a simulation method like system dynamics.