State Space Models

All state space models are written and estimated in the R programming language. The models are available here with instructions and R procedures for manipulating the models here here.
Showing posts with label IR_LM Model. Show all posts
Showing posts with label IR_LM Model. Show all posts

Wednesday, March 11, 2026

Future Scenarios for Iran




In an Opinion piece for the NY Times How Does This End? Four Scenarios for What Comes Next With Iran, Bret Stephens argues that there are four likely future scenarios for the War in Iran: (1) Regime Change, (2) Regime Modification, (3) Both sides declare 
victory and (4) the Realistic Path, US seizes Kharg Island (see the video above which argues that the "Realistic Path" is a trap). These scenarios are all relatively short-term.

My interests are in more long-term Geopolitical Alignments that might benefit Iran. It seems that most of the World-System has abandoned Iran. Russia, China, and the EU are all sitting on the sidelines while the US and Israel continue an Air War. And, my simulations with the IR_LM model show that leaving Iran to "go it alone" (the Business-as-Usual or BAU model) produces the best future prospects (see the simulations here). The US and Israel seem intent on not letting the BAU Scenario go forward.

I asked ChatGPT about the Geopolitical Consequences of the current US-Israel-Iran War:


I can investigate the effects of a Global Oil Shock by using the WL203 Model.



The third component state variable (see Notes below) is dominated by Oil Prices. A large one standard deviation shock to the W3 component (an Oil Price Shock and associated effects: Wheat Prices, Oil Production and Ecological Footprint) produces the shock decomposition above. Overall growth in the World System (W1)  takes a negative shock that is never fully recovered. The same is true for the W2 state variable (an Environmental Controller); the negative shock is never recovered. Eventually, however, Oil Price Controller (W3) returns to the attractor path.


Notes

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


Further reading:

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