Austerity Forecasts for the UK (1980-2060)

The AUST index (see the details below) captures a number of issues of importance in UK Politics: (1) Increasing military expenditures to meet Russian Challenges and US withdrawals from NATO, (2) Increasing Health Expenditures to upgrade the National Health Service (NHS) and at the same time, (4) Not reducing Education Expenditures and (5) Not increasing overall Government expenditures.

Notes

• Shefner, 2015 here and here Austerity and Anti-Systemic Protest, JWSR.
  
  
  

UK AUST Measurement Model

The AUST index has three components that explain 96% of the variation in the indicators. AUST1 = (Overall Growth), AUST2 = (GE+G+GE-GH) and AUTS3 = (G+GM-GE-GH) where GE=(Government Education), G=(Total Government), GE=(Government Eduction), GH=(Government Health) and (GM=Government Military).

Overtime, AUST1 increased and reached a asymptote around 2010, AUST2 peaked in 1975 and 2010 and AUST3 increased from 1975 until 2000 and then started increasing again after 2010.

UK AUST1 AICs

The best AUST1 model takes the W-index as input.

UK AUST1 W Input Model

The AUST1 W-Input model is stable with negative effects from W3 (World Commodity Markets).

Over time

W3 peaks around 1980 and increases again after 2010.

Hardship Forecasts for the United Kingdom (1980-2060)

Notes

UKL20 HARD Measurement Model

UK1 AIC Statistics

 

UKL20: Shrinking the Financial Sector (1980-2060)

 

A 2026 change in political leadership in the United Kingdom (UK) triggered by a no-confidence vote, brings up the issue of what policies might be expected from the new Labor Government, potentially headed by Andy Burnham, champion of the Green New Deal UK. One of the core goals of the Green New Deal UK (see Notes below), based on analogies to the 1930s New Deal in the US, is to restructure the UK Financial Sector.

In this post, I am going to present an index of UK Financialization (FINZ) and how it might be affected by various Geopolitical Alignments as a result of Brexit, Britain leaving the European Union (EU).

The graphic above shows five possible Geopolitical Alignments and how they might affect the FINZ1 index (see Notes below, the growth component). Business-as-Usual (BAU) creates unlimited growth in the Financial Sector while other alignments (a Random Walk, RW, the US, the World System, W, and the EU) stabilize or contract the Financial Sector. The biggest contraction comes from alignment with the EU, which may have been another motivation for Brexit.

As a result of Brexit, the UK now has the opportunity to stabilize the Financial Sector by regulation Capital-Asset Ratios, Nonperforming loans and Commercial Banking growth. Whether it can redirect investment toward Green Energy Deployment is hard to predict. Although the UK has been every successful reducing CO2 Emissions; investments in dirty energy projects will not be very attractive.

Notes

• A Green New Deal First Report of the Green new Deal Group
• Stern Review (2006): The Economics of Climate Change
• The Global Justice Report A plan for equality and prosperity within Planetary boundaries.
• Institute for New Economic Thinking UK economists and thinkers from a range of disciplines who challenge conventional wisdom and advance ideas to better serve society.

UKL20 FINZ Indicator Codes

UKL20 FINZ Measurement Model

The components explain 96.7% of the variation in the indicators. FINZ1=(CommercialBanking-BankCapital-LiquidReserves). FINZ2=(BankCapital-NonperformingLoans), FINZ3=(Growth).

Historically, FINZ1 (Banking Capital and Liquid Reserves) was in balance until after 1975 as the period of Neoliberalism started. FINZ2 (BankCapital-NonperformingLoans) came into balance after 1965. FINZ3 (Overall Growth) was cyclical throughout the late 20th Century.

UKL20 FINZ1 AIC Statistics

UKL20 FINZ1 EU Model

UKL20 FINZ1 US Model

UKL20 FINZ1 UK Model

UKL20 FINZ1 BAU Model

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UKL20: Net Zero By 2050?

 

An important goal of UK's A Green New Deal framework (see below) is to "decarbonize fast". The graphic above shows rapid reduction in CO2 levels after 2010 and a forecast (from the UKL20 Model) of Net-zero Emissions before 2050.

The second goal of UK's A Green New Deal framework (see below) is to "transform the Economy," particularly the Financial Sector. I cover that goal in another post, Shrinking the Financial Sector. The other three goals of A Green New Deal (Global Justice, Jobs and Protecting Nature) I will cover in future posts.

A reasonable hypothesis is that the UK is on the way to meeting it's Green New Deal goals in spite of Brexit, unless Neoliberalism reasserts itself and derails the project.

One material condition that would benefit A Green New Deal project is a Steady State Economy. For growth of the UK, the UK1 Model would require stabilization with possible input from the World System. CO2 stabilization would require creating reasonable Policy Wedges and the political will to take action where needed. 

The graphic above shows a Random Walk (RW) forecast from the UKL20 BAU Model starting after 2010 (dashed red line). The solid red lines show a 60% reduction Policy Wedge in CO2 Emissions. The UK Climate Change Act of 2008 required, by law, an 80% reduction in CO2 Emissions by 2050 (when the Act was first proposed, a 60% reduction was required).

The UK CO2 Emission reductions are generally considered a success. But,

UKL20 System Stabilization might not be compatible with "fast decarbonization" (see below).

I'll cover the "system stability" problem in another post (here). For further discussion of feedback loops see the UK Economy.

For my current and future posts see Blog Roll: The United Kingdom. You can run the  UKL20 BAU Model yourself on my Google site. For more information about this blog see the About Page. For more information about how the models were constructed and data sources, see the Boiler Plate and Blog Roll: Dynamic Component Models.

Notes

• A Green New Deal First Report of the Green new Deal Group
• Stern Review (2006): The Economics of Climate Change
• The Global Justice Report A plan for equality and prosperity within Planetary boundaries.
• Institute for New Economic Thinking UK economists and thinkers from a range of disciplines who challenge conventional wisdom and advance ideas to better serve society.
• Peak Oil Forecast and Global Warming A negative feedback loop for CO2 Emissions.
• A More Conservative Peak Oil Forecast No one knows the future!
• UK Climate Change Act of 2008 CO2 reductions mandated by law.
• Policy Wedges and State Space Simulation Models Policy wedges based on simulation models present a rational way of setting policy targets.

UKL20 TECHP Measurement Matrix

TECHP1 = (Q/N - L/N - CO2/N) Overall Productivity compared to Labor productivity and CO2 productivity. TECHP2 = (EG/N + CO2/N - L/N) Energy productivity and CO2 productivity compared to Labor Productivity. TECHP3 = (Overall Productivity Growth).

UKL20 CO2 Model

The model is stable.

UKL20 CO2 Model AIC Statistics

The best CO2 emission model for the UK takes TECHP (Technical Productivity) as input.

UKL20 Measurement Model

The UKL20 Measurement Model defines the state space of the UK DCM model: UK1 = (Growth-CO2-LU), UK2 =  (CO2+EG - LU - L)  UK3 = (LU + EG + N). Notice that (1) the component explaining the most variance (63.4%) is not an overall growth component but rather an historical growth controller, (2)  CO2 Emissions are important indicators in both UK1 and UK2 and (3) Both UK1 and UK2 are unstable components in the UKL20 model.

Stabilizing the UKL20 model requires reducing the responsiveness of UK1 and UK2 feedback loops to shocks. The rapid decline in CO2 emissions prior to 2010 was certainly a shock and if it was linked to a rise in Unemployment in Dirty Energy industries, it would have been a double shock to growth. 

 A Green New Deal is focussed on "rapid decarbonization," not system stability or coordinating the create of new "green" jobs or possible effects on Hardship Dynamics.

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Spain: Growth Forecasts (1980-2100)

July 8 2026 Trump Lashes Out at Spain: ‘Cut Off All Trade.’ Here’s Why That’s Unlikely.

The New York Times article (above) argues that Trump Trade threats are unlikely to have much effect on Spain (ES). Spain is a member of the European Union (EU) and is subject to EU agreements about trade. If the Trump Administration violated these agreements, there would be an EU-wide negative reaction, possibly a Trade War.

One way to validate this conclusion is to look at various Geopolitical growth forecasts for Spain (ES1 in the graphic above). Alignment with the US or the World System (W) is not much better than a Random Walk (RW). Business-as-Usual (no Geopolitical Alignment) either with Technological Learning-by-Doing (BAU)  or without  (ES2-3) provides a middle-ground. Unlimited Exponential Growth is forecast as the result of alignment with the EU.

Spain should not be and is not worried about Trade Shocks from the US and Trump threats will have little impact.

You can run the ESL20 model yourself using R-code here. For more of my posts see the Blog Roll: Spain. For information about how the ESL20 model was constructed and data sources, see the Boiler Plate and Dynamic Component Models.

Notes

• The Economy of Spain a highly developed social market economy. It is the world's 14th-largest by nominal GDP, the fourth-largest in the EU, and the sixth-largest in Europe. 
• The Politics of Spain under the framework established by the Constitution of 1978. Spain is established as a social and democratic sovereign country wherein the national sovereignty is vested in the people, from which the powers of the state emanate.
• The Geography of Spain a transcontinental country located in southwestern Europe and northern Africa, occupying about 84.6% of the Iberian Peninsula. Its territory includes a small exclave inside France called Llívia, the Balearic Islands in the Mediterranean Sea, the Canary Islands in the Atlantic Ocean, and several territories on or near the North African coast.
• IMF: Spain's Shift to Success For the first time in its modern history, Spain’s economy has come out of an international crisis stronger than it went into it.

ESL20 Measurement Model

The Growth Component (ES1) is a relatively equal weighting of all the indicators (CO2 Emissions, Energy Use, GDP, Labor Force, Population, Unemployment, Ecological Footprint, KOF Globalization Index and the Human Development Index). The other two components (ES2 and ES3) are Historical Feedback Controllers.

 

 

Switzerland (1960-2100) Population Forecasts

 

June 14, 2026 Switzerland Rejects Measure to Cap Its Population at 10 Million from the NY Times. The referendum was about limiting migration after the number of residents rose by more than a quarter since 2000, but it was framed around affordability and sustainability.

The Population Cap (solid red line in the graphic above) proposed for Switzerland will not automatically be reached by any of my forecasting models, although the stable Business-as-Usual (BAU) model (see below) might eventually reach a steady state at a level lower than 10 Million after 2100. 

The best forecast (using the Akaike Information Criterion) is the CH_LM (Late Modern) model driven by Western Europe (WE, the dashed red line in the graphic above, state-space model presented below). However, linking to the EU (see below) breaks the Population cap around 2030. Notice that linking to the US leads to Population collapse.

For more information about Switzerland, view the Blog Roll: Switzerland. The video at the beginning of the Blog Roll explains why, even though the Population Cap referendum failed, it will keep coming up in the future and will probably pass at some point.

The forecasts at the beginning of this post show the Geopolitical cross-pressures Switzerland is under. Germany (WE, Western Europe) and the US are Switzerland's largest trading partners (see the DE_LM model below, which also leads to Population collapse). On the other hand, Switzerland is "a highly developed free-market economy, ranked first in the world since 2015 on the Global Innovation Index (Wikipedia, see below)". To limit Population (without the cap) it could well chose to "go it alone" with the BAU model. 

It is also interesting that the Population cap, pushed by the right-wing Swiss People's Party, serves Environmental goals. 

Using the Kaya Identity, Population Stability (N) would stabilize CO2 Emissions and, ultimately, Global Temperature (T). Eventually, these two forces may come together and create a Steady-state Economy in Switzerland.

For more information about Switzerland, view the Blog Roll: Switzerland.

Notes

Wikipedia Links

• Economy of Switzerland a highly developed free-market economy. The Swiss economy has ranked first in the world since 2015 on the Global Innovation Index and third in the 2020 Global Competitiveness Report. According to United Nations data for 2016, it is the third richest landlocked country in the world after Liechtenstein and Luxembourg.
• Politics of Switzerland a federal state with representative democracy.
• History of Switzerland the Swiss Confederation has been a federal republic of relatively autonomous cantons, some of which have a history of federation that goes back more than 700 years, putting them among the world's oldest surviving republics.
• Geography of Switzerland a mountainous landlocked country located in Western and Central Europe. 
• Demographics of Switzerland has 9 million inhabitants, as of June 2024. Its population quadrupled over the period 1800 to 1990 (average doubling time 95 years). Population growth was steepest in the period after World War II (1.4% per annum during 1950–1970, doubling time 50 years), it slowed during the 1970s and 1980s but has since increased to 1% during the 2000s (doubling time 70 years).
• Cartography of Switzerland Switzerland has had its current boundaries since 1815, but maps of the Old Swiss Confederacy were drawn since the 16th century. 

AIC Statistics

All of the Akaike Information Criterion (AIC) Statistics have values in the 800 range except for the RW Model (Random Walk), which is best in the short-term (year-to-year).

CH_LM Western Europe Input

The CH_LM Model (WE, Western Europe Input) is stable and  provides the best Attractor Path, but it breaks the 10 million Population cap around 2030. From ChatGPT:

Switzerland, since it is not an EU member, is not obliged to accept migration from other EU members or link it's population to the EU. 

CH_LM BAU Model

The BAU model is stable and reaches a steady state after 2100 below the 10 million Population Cap.

CH_LM US Input

The CH_LM US Input model is stable but leads to population collapse with strong negative forces from the US Feedback components, US2 and US3.

CH_LM_N Model with DE_LM input

The CH_LM_M DE Input model is unstable and leads to population collapse in Switzerland.

East-Asia Pacific: Alternate Futures

 

May 15, 2026 Trump-Xi summit ends on cordial note but no breakthroughs ... - CNN

President Trump seems attracted to the old idea of Spheres of Influence when pursing Geopolitical Alignments. Critics argue that the idea is useless, at least for the US and China in the 21st Century. But President Trump presses ahead, leaving Europe and NATO while focusing more directly on Latin America. The idea seems to be that China's Sphere of Influence would naturally be the East-Asia Pacific Region (EAP). In this post, I use the EAP_L20 Model to ask what type of Geopolitical Alignment (if any) would be best for the people of the Indo-Pacific.

All of the Geopolitical Alignments for the EAP Region are unstable (except with China) while alignment with China (CN) produces rapid growth-and-collapse out to 2100.

In other words, allowing CN to assert it's Sphere of Influence over EAP would produce growth and stability benefits for the Indo-Pacific. China, however, does not seem to be interested.

Notes

Measurement Model

AIC Statistics

EAP_L20 Model CN Input