FRANCE (1980-2100): Debt Crisis Forecasts

In a prior post (French Debt, Collapse of the Government and COVID-19), I presented a single Business-As-Usual (BAU) forecast for French DEBT. In this post, I present some Geopolitical policy options (hypothetical forecasts)  for lowering DEBT. They are presented in the graphic above.

• BAU Model (BAU) Debt keeps rising but eventually stabilizes after 2100 when France becomes a Steady-State Economy at a higher level of debt.
• Random Walk Model (RW) In the random Walk (RW) policy makers try "one damned thing after another" trying to find a solution. Anything can happen, but the RW will create continuing street protests.
• European Union (EU) Models Membership in the EU provides certain constraints on Debt. If France operates within these constraints, debt is forecast to return to pre-2000 levels (notice that policy actions after 2000 kept Debt from climbing).
• US Geopolitical Leverage (Wall Street) If Wall street calls the shots, French debt is forecast to fall back to 1980 levels.
• World Geopolitical Leverage (Global Debt Markets) If France aligns itself with Global Debt Markets, DEBT is forecast to fall to levels not seen in the Late 20th Century.

What the French Political System might do in the future is not clear, but see my best guesses below.

A Blog Roll of my current postings on France is available here.

You can run the FRL20 Model written in R-Code on my Google Site (here). The French Economy is stable and headed toward a Steady-State Economy around 2030.

Notes

• French Debt, Collapse of the Government and COVID-19 The lingering effects of the COVID shock are still with us and the French government is still preoccupied with Random Walk components rather than controlling the overall Economy.
• Has Austerity Helped or Hurt the French Economy? It's complicated but leads to a lot of Protest.
• Breaking Cycles of Austerity in France Find some way other than Austerity to control the Economy.
• How Does the Economy of France Work? The main controllers of the French Economy are not Austerity and Neoliberalism but rather the Environment and Unemployment.

Wikipedia Links

• Economy of France  a highly developed social market economy with strong state participation in strategic sectors. It is the world's seventh-largest economy by nominal GDP and the ninth-largest economy by PPP, constituting around 3% of world GDP.
• Politics of France  a semi-presidential system determined by the Constitution of the Fifth Republic. The nation declares itself to be an "indivisible, secular, democratic, and social Republic". The constitution provides for a separation of powers and proclaims France's "attachment to the Rights of Man and the principles of National Sovereignty as defined by the Declaration of 1789".
• History of France he first written records for the history of France appeared in the Iron Age. What is now France made up the bulk of the region known to the Romans as Gaul. 
• 2000 in France The year 2000 is in particular remembered in France by a media campaign on the conditions of detention of prisoners. A parliamentary board of inquiry was created. The conclusions of the report were that French prisons were both unhealthy and over-populated. The sanitary arrangements were considered to be scandalous. The government of Lionel Jospin launched a program to renovate and build new prisons.
• Geography of France a terrain that is mostly flat plains or gently rolling hills in the north and the west and mountainous in the south (including the Massif Central and the Pyrenees) and the east (the country's highest points being in the Alps). Metropolitan France has a total size of 551,695 km² (213,011 mi²) (Europe only). It is the third-largest country in Europe by area (after Russia and Ukraine) and the largest in Western Europe.

 FRL20 DEBT Measurement Model

The French Debt Controller is FR1 = (Q-DEBT). Typically, DEBT is measured as a percentage of GDP, however the comparison does not reveal whether DEBT in under control.

 FRL20 DEBT BAU Model

The FRL20 DEBT BAU model is stable and under control.

FRL20 DEBT AIC Statistics

The Akaike Information Criterion (AIC) statistics for the FRL20 DEBT Models are presented above. Using the AIC, the RW model is best. The other models have overlapping Confidence Intervals so it difficult to pick a second-place model. I imagine that, under uncertainty, policy makers choose BAU or RW but France also has to satisfy the EU.