"What intrigues us as a problem, and what will satisfy us as a solution, will depend upon the line we draw between what is already clear and what needs to be clarified," Nelson Goodman.
State Space Models
Monday, July 7, 2025
World-System (1950-2100+) Global Temperature Projections
Sunday, June 22, 2025
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.
The Axis of Evil
Friday, June 13, 2025
World-System (2000-2150) China and the Global South
Thursday, June 12, 2025
World-System (2000-2100) Six Futures for China, One Scary
Notes
Wednesday, June 11, 2025
World-System (1950-2150) India as a Small Regional Country
Notes
Monday, June 9, 2025
World-System (1950-2150) Hegemonic Dominance Forecasts
here
Friday, June 6, 2025
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
Friday, May 23, 2025
About
Tuesday, May 6, 2025
World-System (1950-2050): A Range of Forecasts for US Growth
Notes
Friday, May 2, 2025
World-System (1950-2040) Power Outage in Spain and Portugal
Negative shocks to each country model show that the economies would respond differently. Spain (ES1) has the best recovery but it takes a few years. Portugal (PT1) and the WE1 react very poorly to negative shocks and essentially do not recover the same level of growth. Shocks to these countries include Great Recession, 2020 pandemic, 1997-2007 real estate bubble, the 2008 financial crisis burst Spain's property bubble, 2008–2014 Spanish financial crisis, the Spanish Real Estate boom and rocketing oil prices, Spanish property bubble, 2008–2014, Spanish real estate crisis (the bubble imploded in 2008), record oil prices by the mid-2000s, financial crisis of 2007–2008, April 2007 The Economist described Portugal as "a new sick man of Europe", European sovereign debt crisis, formation of the European Union (EU) in 1999, the September 11 Attacks in the United States in 2001, and the Eurozone debt crisis. ES, PT and WE have all had many shocks to deal with after the turn of the century.
Notes
Sunday, March 30, 2025
Boiler Plate
Notes
State Space Model Estimation
Atlanta Fed Economy Now
While the app is still available, there have been some interesting developments. In earlier forecasts, the Atlanta Fed was showing GDP growth predictions outside the Blue Chip Consensus. Right now, after unorthodox economic policies from the Trump II Administration, the EconomyNow model is predicting a drastic drop in GDP (the Financial Forecast Center is only predicting a slight drop here).
While the app is still available, there have been some interesting developments. In earlier forecasts, the Atlanta Fed was showing GDP growth predictions outside the Blue Chip Consensus. Right now, after unorthodox economic policies from the Trump II Administration, the EconomyNow model is predicting a drastic drop in GDP (the Financial Forecast Center is only predicting a slight drop here).
Another comparison for what I have presented above are the IPCC Emission Scenarios. These scenarios are for the World System. Needless to say, (1) the new Right-Wing Republican administration plans on withdrawing the US from all attempts to study or ameliorate Climate Change and (2) the IPCC does not produce any RW modes for the World System (but seem my forecasts here).
Climate Change
World System
Hurricane Forecasting
Climate Change
Error Correcting Controllers (ECC)
In another post (here), I presented Leibenstein's Malthusian Error Correcting Controller (ECC). It can be generalized to the dominant ECCs in most theoretical economic models (above). These controllers can be further generalized. For example, (X-U) and (L-U) can be generalized to (N-U), a more general Urbanization Controller which describes market expansion for economic growth. In countries and periods with limited data, (N-U) might subsume all these processes. ECCs describe important feedback processes in SocioTechnical System that are typically not recognized as such in academic literature.
Kaya Identity
The basic theoretical model underlying all the World-System models I crate is the Kaya Identity. There are a number of advantages to starting theoretical development with the Kaya Identity: (1) An "identity" is true by definition Adding other variables to the model ensure that theory construction is on a solid footing. (2) The Kaya Identity is also used as the foundation for the IPCC Emissions Scenarios allowing a linkage between World-Systems Theory and the work of the IPCC.
The basic theoretical model underlying all the World-System models I crate is the Kaya Identity. There are a number of advantages to starting theoretical development with the Kaya Identity: (1) An "identity" is true by definition Adding other variables to the model ensure that theory construction is on a solid footing. (2) The Kaya Identity is also used as the foundation for the IPCC Emissions Scenarios allowing a linkage between World-Systems Theory and the work of the IPCC.
World Development Indicators (WDI)
After WWII, extensive data sets on all countries in the World-System became available from the World Bank (here). The indicators above where chose to construct the state space for each WDI-based model. Addition indicators can be added for specific forecasts and analyses.
Monday, March 17, 2025
World-System (1960-2006) Seven Futures for Argentina
Notes
The Error Correcting Controllers (ECC) are (Growth-EF), (LU+EF+KOF-Q), (EF+CO2-KOF-LU). It is interesting and somewhat unusual that, in Argentina, growth is controlled by the Ecological Footprint (EF) and the EF is important in the other two ECCs.