Has Germany Become a Steady State Economy?

 

The IMF (here) among other commentators (here) think that the German economy is in trouble. The conclusions are based on the assumption of Unlimited Economic Growth. What if the techno-optimist assumption is wrong? What if growth cannot continue forever and our macro-TechnoSocial systems must become Steady State Economies? Is there any evidence that any economies are already reaching Steady State and what are the implications, good or bad, if they are? HINT: from the graph above, the Deutsch Empire (DE) has been in a steady state since 2010. I'll explain all this in a future post.

If you want to experiment yourself with the DEL20 systems model, you run it on line and experiment with coefficients here. Notice that the two error correcting controllers in the Measurement Matrix are (EF-GDP), the Ecological Footprint compared to aggregate production and (N-CO2), population minus CO2 emissions. In other words, environmental constraints are creating the steady state in Germany not economic policy failures.

You can implement the current Neoliberal policy measures creating unlimited economic growth. Just change one coefficient in the System Matrix from F[1,1] = 0.95349473 to F[1,1] = 1.04, a not unreasonable four percent growth rate. What happens to the Ecological footprint and to CO2 emissions?

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 DEL20 BAU Model here.