World-System (2000-2150) Seven Futures for Iran

The Trump II Administration in the US has just attacked Iran and claims to have seriously damaged Iran's Nuclear Sites (here). Iran claims it will retaliate, but the future after the unprecedented attack using B2 Stealth Bombers and Bunker Buster Bombs remains unclear both for Iran, the US and Israel (who started the attacks on Iran). The future is unknowable and there is a lot of current speculation. I can use the IR_LM (Iran, Late Modern) model to project seven possible future scenarios for Iran (graphic above).

The Business-as-Usual (BAU) model is clearly the best and it forecasts unending exponential growth for the Iranian Economic System. The worst scenario is Geopolitical Alignment with China (CN) which leads to collapse. The scenario for alignment with Russia (RU), (light-blue dashed line) is quite cyclical and unstable. Alignment with the US produces stable growth out to 2100. The World System (W) and the EU Alignment models are not much better than a Random Walk (RW).

These seven scenarios suggest that Iran would prefer to be left alone to pursue its own future, but that seems unlikely to happen. Geopolitical Alignment with the US  would also produce a desirable future, but that also seems unlikely to happen. Russia (RU) might be attractive in the very short run but that alignment will prove to be unstable. This leaves Iran with no desirable futures within the IR_LM BAU model.

You can experiment yourself with the IR_LM BAU model here. The period prior to the Iranian Revolution of 1979 sowed possibilities of alignment with the West, but after the Revolution the economy was converted into strong central planning aimed at Autarky (see the Economic History of Iran). In these circumstances, the IR_LM BAU model could be stabilized at any time by reducing growth rates (a counterfactual you can run here). Notice in the IR_LM BAU Model that the feedback controllers are dominated by Globalization, Unemployment, Ecological Footprint and Energy Use.

ChatGPT reports the following:

For more information about how the statistical models were constructed and estimated see the Boiler Plate.

World-System (2000-2150) China and the Global South

 

In a prior post (here), I looked at China's possible Geopolitical Alignments, first with the World-System and then with Russia. In this post, I look at China's possible Geopolitical Alignments with the Global South. In the long-run, alignment with Latin America (LA) would clearly be in LA's interest; Africa (AF), not so much.

World-System (2000-2100) Six Futures for China, One Scary

 

Most Geopolitical Alignments are mildly beneficial, except for alignment with the World System which is not. The order of benefits (in terms of comparison to a Random Walk, RW) are Asia Region (AXJ), Business as Usual (BAU, no alignment) and United States (US). 

One forecast missing from my standard forecasts (and the most concerning) is the one involving Geopolitical Alignment between Russia and China. Although the alignment has been publicly proclaimed by each country, there is increasing concern about CN intelligence activities in Russia (here). For more information about China-Russia relations, see the Wikipedia page (here).

I will investigate Global South alignments for China in a another post here. For more information about how the statistical models were constructed and estimated see the Boiler Plate.

Notes

Excerpts from ChatGPT:

The ChatGPT conclusions are personifications not Systems Analysis. 

World-System (1950-2150) India as a Small Regional Country

 

A recent article in the New York Times (here) about the evident decline of US Hegemonic Power suggests that India (IN) might be one of the countries competing for world leadership once US dominance has passed. India might well try to resurrect the "... Indosphere, a zone of Indian cultural and linguistic influence that stretched far beyond the subcontinent in the period roughly between 250 B.C. and A.D. 1200..." The question not being asked here is what would be the best Geopolitical Alignment for a country such as India and does that alignment involve Hegemonic domination of the World-System. This post investigates the question by estimating a state space model for India in the period (1950-2000) and then testing various Geopolitical Inputs to see the effect on the Indian Economy.

The graphic above shows the two state variables, IN1=(Growth) and IN2=(Q-N), with forecasts out to 2150. The best model (in terms of the AIC statistic, AIC=-6272.714 when compared to the BAU model AIC=-385.2805, smaller is better) to produce those forecasts (see the Boiler Plate for a description of the state space model and the data sources used) is the IN_LM_SC model (a Small Open Country) model. It shows that India would be approaching a steady state around 2150 when part of the Asia Region.

In another post (here), I look at alternative forecasts for World-System Hegemonic Dominance. India is one of the also-ran countries (in fact, the worst performer), not providing large growth stimulus to the World-System. In the upcoming period of Environmental Crisis and Hegemonic Chaos, maximum growth might not be the best choice for the World-System but it will be a Dynamic Attractor.

Notes

In term of Systems Theory, a Small Open Country is one that has no state variables. The state of the system is driven by the dominant Input Economy (the Asia Region in this case).  Here are the System Matrix (F) and the Input Matrix (G) for the IN_LM_SC model:

The small values for the coefficients in the System Matrix (e.g., -2.605049e-23) are effectively zero to within machine precision.

You can run the IN_LM_SC model yourself at the following Google Sites (here).

World-System (1950-2150) Hegemonic Dominance Forecasts

A few new books have been written and reviewed in the New York Times (here) about the evident decline of US Hegemonic Power in the Trump II Administration. From what I can tell, all of the discussions are  qualitative and speculative. Since the Future is unknown, there is plenty of space for conjecture.

What has not seemed to have been done is to make multi-model forecasts for the World System given inputs for different countries that are competing for Hegemonic Dominance. Since I have state space models for the World System and all of the Hegemonic contenders (you can inspect and run the models here), I might as well see what the forecasts say.

The graphic at the beginning of this post shows seven alternative forecasts for overall growth in the World System.

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World-System (1980-2080) Alternative Forecasts for US CG Debt

The US Congress is currently debating a Spending Bill being advanced by the Trump II Administration that will add $2.4 Trillion to the Deficit. In a prior post (here), my model for the US Economy forecasts that Central Government (CG) Debt will decline (the forecast was made after the Trump I Administration). I have also suggested that the outcomes of the Trump Administrations cannot be forecast because they are essentially a random walk (here).

In the graphic above I give four forecasts for US CG Debt (data taken from the World Development Indicators, see the Boiler Plate). The Random Walk (RW) line is meant to show that Debt Shocks (see the Trump I Administration) can happen at anytime in the future and are unpredictable. The prediction driven by the USL20 Model (US, dashed green line) shows the decreasing path of US CB Debt. The prediction driven by the WL20 Model (W, dashed blue line) shows debt peaking around 2050. The Business as Usual Line (BAU) shows debt growing linearly (it actually levels off in 2500).

One point to make is that all these models are stable (largest eigenvalue < 1.0)**. This means that none of my models predict that US CG DEBT is out of control or will grow forever (uncontrolled exponential growth). However, other Econometric models (for example, the Penn-Wharton Budget Model, PWBM) forecast that the US has about 20 years before Debt levels become unsustainable.

My best guess? Given that my forecasting models are stable and that the Trump Shocks will eventually be history, it seems reasonable to project that US CG Debt will keep pace with growth in the US Economy and will eventually stabilize when economic growth is over (see my forecasts for US  Economic growth here).

NOTES

** All my models are estimated from historical data and are not assumed, prior to estimation, as either stable or unstable (as are most Economic Models). For more information about the models I use and data sources, see the Boiler Plate.

I analyze the causes of the US CG Debt Bubble in another post.

About

 

This blog takes it's title from a book by Nelson Goodman Fact, Fiction and Forecast. The blog documents and explains World-System state pace models and forecasts the results out into the future. No one can know the future and forecasting, at first glance, might seem foolish. Forecasting may or may mot help us understand the future but it does help us understand our quantitative models. So, we keep doing it.

Code for my state space models is available in Google Sites. A list of my blogs is available here. More information about the statistical state space models is available here.