The Trump II administration, which took office in January 2025, is threatening to impose tariffs on Latin American Countries , in turn, the Latin American Countries are threatening retaliation on the US (here). Rather than investigating whether this trade war is a good or bad thing, let me take a broader look at Latin America's future from the perspective of Geopolitical Alignment (I'll look at Mexico, Venezuela, Columbia, Panama, etc. in future posts).
Latin American faces a wide range of futures from unlimited exponential growth if aligned with China (CN, in the graphic at the beginning of the post) or collapse if aligned with the World System (W). But, let's take China out of the picture (assuming the US would resist such a future). The graphic above shows the "also ran" input models:
- BAU The Business as Usual model (which you can run here) is cyclical but has the best growth out to 2100.
- TECHE The Technical Efficiency model is stable and a strong contender (AIC = -160.3, smaller is better).
- TECHP The Technical Productivity Model is also stable and has one of the best statistics (AIC = -264.3). This model is the Systems Theory analog of the Neoclassical Economic Growth Model with erogenous technological change.
- US The model drive by the US is also stable, cyclical and an obvious contender given the history of Latin America (AIC = -85.96).
- RW In the short run, the Random Walk is a strong contender (AIC = -108.1)
- W The World System input model is stable, cyclical and also a strong contender (AIC = -71.53). Unfortunately, it leads to collapse starting in the very near future.
You can experiment with the LA20 BAU model here. Instructions for modifying the model to produce stable and/or cyclical patterns are given in the code. I believe that the BAU model describes how policy makers think about their own economy, regardless of what Systems Theory right tell them about "Best or Worst Models" (an important Contradiction).
Notes
LA_SYS Model Summary:
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