State Space Models

All state space models are written and estimated in the R programming language. The models are available here with instructions and R procedures for manipulating the models here here.

Tuesday, September 30, 2025

World-System (1960-2100) Eight Forecasts for Venezuelan Growth

 


November 14, 2025. The New York Times is reporting (here) that:

The Trump administration is rapidly escalating its pressure campaign against Venezuela, with America’s largest aircraft carrier, the Ford, about to take up a position within striking distance of the country, even as President Trump’s aides provide conflicting accounts of what, exactly, they are seeking to achieve.

The urgent question in the media right now seems to be whether Trump will invade Venezuela or just continue marching around in the Caribbean trying to insert his Manifest Destiny. My question is more general: what is best for the Economy of Venezuela, particularly in terms of Geopolitical Alignments?

The graphic above shows eight different growth forecasts for VE1 (the overall growth component of the the VEL20 model, see the Notes below). From the AIC statistics alone, the Random Walk (RW, not surprising since "the Venezuelan economy has been in a state of total collapse since 2013" here) is the best short-term model while Geopolitical Alignment with the Latin American Region (LAC) provides the best stable Attractor Path. But, these Geopolitical Alignments are not the only options.

The "best" options for a stable growth path, just looking at the time series plot, are for Venezuela to pursue Technical Efficiency (TECHE), another version of the Business-as-Usual (BAU) model with emphasis on Technology. Another way of saying that the Venezuelan Economy should be left alone to pursue it's own business.

Linkages with the US, World System (W) and (worst of all, China, CN) are all worse than a Random Walk. Emphasizing Neoliberal Technical Productivity (TECHP) is also worse than a RW.

You can run the VE20 BAU model here and explore alternative futures.


Notes

Background


VEL20 Measurement Model






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