Boiler Plate

 

Notes

The first six indicators in standard scores are taken from the World Development Indicators (WDI). KOF = KOF Index of Globalization, EF = Ecological Footprint, HDI = Human Development Index. 

State Space Model Estimation

The Measurement Matrix for the state space models was constructed using Principal Components Analysis with standardized data from the World Development Indicators. The statistical analysis was conducted in an extension of the dse package. The package is currently supported by an online portal (here) and can be downloaded, with the R-programming language, for any personal computer here. Code for the state space Dynamic Component models (DCMs) is available on my Google drive (here) and referenced in each post.

Atlanta Fed Economy Now

My approach to forecasting is similar to the EconomyNow model used by the Atlanta Federal Reserve. Since the new Republican Administration is signaling that they would like to eliminate the Federal Reserve, the app might well not be available in the future.

While the app is still available, there have been some interesting developments. In earlier forecasts, the Atlanta Fed was showing GDP growth predictions outside the Blue Chip Consensus. Right now, after unorthodox economic policies from the Trump II Administration, the EconomyNow model is predicting a drastic drop in GDP (The Financial Forecast Center is only predicting a slight drop here).

Hurricane Forecasting

My vision for SocioEconomic system forecasting is to follow the US National Oceanic and Atmospheric Administration's (NOAA) approach to hurricane (Economic Crisis?) forecasting using Spaghetti Models (see below).

Currently, Economic forecasting does not use Multimodel Inference but it is getting there! The best state space model for the US SocioEconomic System in the graphic at the beginning of this post is the World System (W) model based on the AIC Criterion.

Climate Change

Another comparison for what I have presented above are the IPCC Emission Scenarios. These scenarios are for the World System. Needless to say, the new Right-Wing Republican administration plans on withdrawing the US from all attempts to study or ameliorate Climate Change.

World-System (1960-2006) Seven Futures for Argentina

 

At the 2025 Conservative Political Acton Conference (CPAC, here) meeting in Washington, DC, Argentinian President Javier Milei gifted Elon Musk the "chainsaw for bureaucracy," a symbol of the deep cuts they both want to make in both the US and Argentina's bureaucracy. Elon Musk waved the chainsaw around on stage at CPAC. Milei has been president of Argentina since 2023 and is considered a right-wing libertarian as is Musk (currently). Milei considers himself aligned with the United States although prior Argentinian governments have sought closer ties with China and Russia (according to chatGPT). This post explores which of those Geopolitical Alignments might be best for Argentina. Another post (here), looks at the Economy of Argentina and whether bureaucracy is the problem.

From the time plot above, the BAU model (no input from other countries) exhibits unstable exponential growth, probably what most economists (including Javier Milei) would want. Alignment with China (CN), on the other hand, would produce unstable collapse. How Argentina would isolate itself from the World Economy is unclear but the country does have geopolitical options with China.

The more moderate alignments (the World-System, W, the US and the Latin American Regional economy LAC) all produce stable economic growth and a resulting steady state economy at some time in the future. Although a steady state economy might be preferred for environmental reasons, it is probably not an end-result embraced by current Argentinian elites. You can run the Argentinian state space model (AR20) under these various geopolitical influences here.

Geopolitical Alignment with Russia (RU) produces the strongest unstable exponential growth. Finally, alignment with Mexico (MX) is not much better than a Random Walk (RW).

Since the Random Walk is similar to the political strategy of the current Trump II Administration in the US (here), it is worth simulating the same future path for Argentina in the time plot above.  The result for Argentina is not the same as the US. Under a Random Walk there are neither growth nor collapse scenarios for Argentina.

Notes

The Akaike Information Criterion (AIC) statistics for all the Argentinian models are presented below.

In the Measurement Matrix below, the first six indicators in standard scores are taken from the World Development Indicators (WDI). KOF = KOF Index of Globalization, EF = Ecological Footprint, HDI = Human Development Index. 

The Error Correcting Controllers (ECC) are (Growth-EF), (LU+EF+KOF-Q), (EF+CO2-KOF-LU). It is interesting and somewhat unusual that, in Argentina, growth is controlled by the Ecological Footprint (EF) and the EF is important in the other two ECCs.

State Space Model Estimation

The Measurement Matrix for the state space models was constructed using Principal Components Analysis with standardized data from the World Development Indicators. The statistical analysis was conducted in an extension of the dse package. The package is currently supported by an online portal (here) and can be downloaded, with the R-programming language, for any personal computer here. Code for the state space models is available on my Google drive (here) and referenced in each post.

Atlanta Fed Economy Now

My approach to forecasting is similar to the EconomyNow model used by the Atlanta Federal Reserve. Since the new Republican Administration is signaling that they would like to eliminate the Federal Reserve, the app might well not be available in the future.

While the app is still available, there have been some interesting developments. In earlier forecasts, the Atlanta Fed was showing GDP growth predictions outside the Blue Chip Consensus. Right now, after unorthodox economic policies from the Trump II Administration, the EconomyNow model is predicting a drastic drop in GDP (the Financial Forecast Center is only predicting a slight drop here).

Climate Change

Another comparison for what I have presented above are the IPCC Emission Scenarios. These scenarios are for the World System. Needless to say, (2) the new Right-Wing Republican administration plans on withdrawing the US from all attempts to study or ameliorate Climate Change and (2) the IPCC does not produce any RW modes for the World System (but seem my forecasts here).

World-System (1980-2060) Seven Futures for Ukraine

 

The presidents of Ukraine (Volodymyr Zelenskyy) and the United States (Donald Trump) recently met (Mar 2, 2025) at the White House to discuss the future of Ukraine and a mineral extraction deal. The meeting was not a success. On March 11, 2025, after a telephone call between President Trump and Vladimir Putin, Ukraine tentatively agreed to 30-day cease fire. It is still not clear whether Russia will abide by the cease fire.

In my mind, these developments bring up the question about what Geopolitical alignment would be best for Ukraine (UA): Russia (RU), the World System (W), the European Union (EU), the United States (US) or none (BAU or RW). The graphic above shows the time plot for the growth component of the UAL20 model under each alternative Geopolitical Alignment. Maybe surprisingly, the US Geopolitical Alignment would be one of the worst! In this post I'll explain the alternative forecasts in detail.

• RW [-8.136  < AIC= 3.753  < 14.38] The Random Walk (RW) model (Just one damned thing after another) provides a comparison to other Geopolitical alignment models (below) using the Akaike Information Criterion (AIC). Ukraine has been buffeted by many shocks to include the 2014 Annexation of Crimea by Russia and the 2022 Russian Invasion of Ukraine. From the time plot above, the future forecast for the RW model is not much worse than the BAU model (no Geopolitical alignment) or alignment with Russia (RU). In the short-run (year-to-year) the RW model is the best descriptor of Ukrainian growth (see the NOTES below).

• BAU [103.6 < AIC= 108.73 < 112.3] The Business As Usual (BAU) provides the best future forecast and the AIC is right in the middle of the pack. However, at this moment in history, it seems that Ukraine will not be isolated from Geopolitical entanglements.

• WORLD [96.17 < AIC = 106.4 < 115.6] Alignment with the World-System would produce a collapse mode, but not the worst.

• US [99.01 < AIC = 106.6 < 113.2] Alignment with the US produces one of the worst collapse scenarios.

• EE [22.18 < AIC =  76.07 < 120.7] Alignment with Eastern Europe also produces a collapse scenario but with recovery around 2050.

• EU [90.97 < AIC = 206.8 < 120.0] Alignment with the European Union, a topic of hot debate for Ukraine, would also produce a mild collapse scenario.
  
  
• RU [65.15 < AIC = 113.4 < 140.6] Finally, Geopolitical Alignment with Russia, which seems to be the aim of the 2022 Russian Invasion of Ukraine, would produce a cyclical growth scenario.
  
  

None of these growth scenarios look great and some are awful for Ukraine. Geopolitical alignment with Russia would currently mean a massive military loss for Ukraine. If, however, Russia were to eventually follow it's best future (alignment with the European Union), the picture would be very different. 

NOTES

The systemic growth state variable (UK1) is interesting in that CO2 (-0.44492), GDP (-0.0949) and Labor Force (-0.431) enter negatively.These negative weightings mean that, in Ukraine, growth is under Error Correction and Control: (Growth-CO2-L). I will have more to say about the result in the discussion of the Ukrainian economy (here).

The first six indicators in standard scores are taken from the World Development Indicators (WDI). KOF = KOF Index of Globalization, EF = Ecological Footprint, HDI = Human Development Index. 

You can run the full UAL20 BAU model here and explore the other Error Correcting Controllers (ECC) which have complicated Malthusian elements.