World-System (1960-2100) Venezuela Growth Forecast

Venezuela is in the news right now for a number of reasons, mainly that the Trump Administration appears to be preparing an invasion. For the future, the VE20 model produces a rather wide range (98% Bootstrap Prediction Interval) ranging from exponential growth to collapse. 

The VE20 BAU Model is stable and will reach Steady State Economy sometime after 2100. For exponential growth or collapse to occur, the model would have to be destabilized, which might happen as a result of invasions or other external interference. An argument can be made that the approach Steady State Economy is part of the explanation for the ongoing  crises.

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

Notes

Data taken from the World Development Indicators (WDI). All variables are in standard scores. The methodology used to create forecasts is similar to the one used by the Atlanta Federal Reserves GDPNow app. Prediction intervals are generated using a Bootstrap algorithm in the R programming language.

You can run the VE20 Model here.

Measurement Model

The VE1 state variable is an overall weighting of all the indicators.

VE20 BAU System Matrix

For the BAU model [147.6 < AIC = 167.2 < 182.8].

VE20 BAU Model Step-Ahead Predictions

The VE20 BAU model does a fairly good job of tracking the historical state variables except for turning points and during crisis periods, of which there are many.