What is Causal Loop Diagram (With Examples)

What is Causal Loop Diagram? (With Examples)

4-5 minutes

Causal loops diagrams (also known as system thinking diagrams) are used to display the behavior of cause and effect from a system’s standpoint. Fishbone diagrams may elicit the categories of causes that impact a problem. Causal loops show the interrelation causes and their effects. When finished you have a diagram of the positive and negative reinforcements which describe the system of behavior. The neat thing about causal loops is it is depersonalizing. People can point at the arrows in the loop that are reinforcing the problem instead of pointing at people. It becomes a model of system behaviors that create the outcome of the system.

A causal loop diagram (CLD) is a causal diagram that aids in visualizing how different variables in a system are interrelated. The diagram consists of a set of nodes and edges. Nodes represent the variables and edges are the links that represent a connection or are lation between the two variables. A link marked positive indicates a positive relationship and a link marked negative indicates a negative relation. A positive causal link means the two nodes change in the same direction, i.e. if the node in which the link starts decreases, the other node also decreases. Similarly, if the node in which the link starts increases, the other node increases as well. A negative causal link means the two nodes change in opposite directions, i.e. if the node in which the link starts increases, the other node decreases, and vice versa.

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Cause Loop Diagram Example – Growth and Investment

A Growth and Underinvestment structure is simply an elaborated Limits to Growth structure where the growth inhibitor is part of another Balancing Loop with an external standard and some delay. The nasty thing about this structure is that the two balancing loops form a single reinforcing loop that inhibits growth.