Introduction:
This study focuses on identifying the complexities of the higher education economy in the country by designing a system dynamics model. The main objective of this research is to identify and evaluate development policies for the higher education economy.
Higher education represents an important type of investment in human resources, which contributes to economic development by providing the improvement of knowledge, skills and attitudes needed by technical and managerial employees and the future workforce. Due to the fact that the university is responsible for training human resources and increasing productivity and efficiency at high levels, therefore, the university has a fundamental role in economic development, and economic development and the development of university education have a mutual relationship and are necessary for each other. One of the most obvious economic manifestations of the higher education system can be found in the relationship between universities, the labor market and the employment system. It is obvious that big and reliable companies want to choose the workforce they need from among the graduates of the best universities. On the other hand, universities and higher education institutions are also ranked based on the opportunities they create for the employment of their graduates. In fact, a relationship and mutual influence has been established between the employment system and the higher education system.

Methodology:
The present research is an application of system dynamics in the development policy of the economy of higher education in Iran. System dynamics methodology is used to model complex systems in order to understand and recognize policy makers from the situation of the problem and to test and ensure the effectiveness of policies, and it includes steps. The first step: identification and Defining the problem: The most important step in modeling is identifying and defining the problem. Second step: designing the causal loop diagram: after identifying the dynamic hypotheses, building a conceptual model (causal loop diagram) expresses the relationship between the phenomena. The third step: designing the flow diagram of the model; The fourth step: simulation and validation of the model; Fifth step: defining different policies, choosing and implementing the appropriate solution.
To achieve the research objectives, the literature and the background of factors related to the issue were first reviewed. Then, a causal loop diagram and flow model were designed and simulated over a 20-year horizon using data from the past decade of the higher education system, implemented in Vensim software.

Results and Discussion:
After conducting sensitivity analysis of the model, ten policies based on four strategies were identified, including the development of higher education financial approaches, enhancement of e-learning capabilities, strengthening the role of higher education in solving industry problems, and advancing the internationalization of higher education. Based on the identified policies, modifications were made to the model, and the results were compared and analyzed.

Conclusion:
Based on the findings of the system dynamics model, the proposed policies include increasing public participation in funding the non-governmental sector, industrial investment in public and private universities, restructuring the budgeting system, allocating performance-based budgets to address industry issues, developing legal and regulatory capacities to attract investment, allocating financial resources for upgrading e-learning infrastructure, fostering university participation in establishing problem-solving systems in industries, enhancing information systems and knowledge management, and attracting international students through marketing and identifying opportunities.