Blog Roll: European Union

 

The European Union is forecast to reach a Steady State around 2050 (see below). The News and Blog Roll below should be read in light of the impending Steady State Economy which might not be perceived by all commentators and politicians as desirable.

 

Apr 15, 2026 Orbán is out. Who’s the EU’s next disruptor-in-chief?

Apr 9, 2026 NATO: Another Casualty of the Iran War?

LeMonde reported, at the end of 2025, that Europe had become the largest supplier of arms to Ukraine, although the armaments were largely purchased from the US. And, in 2026 the EU and South America agreed to form a Free-Trade Zone with 700 million people. EU policy now seems to be a reaction to Geopolitical actions (and inactions) by the Trump II Administrations. From the graphic above (from ChatGPT), Security is not the only problem facing the EU.

I have a number of posts on the EU, but there is much more to analyze in the future:

• Was the EU economy Wrecked by Austerity? Around the turn of the 21st Century, the EU tried to break away from a stable attractor path for growth. They failed. Poor performance of the EU is simply a return to more moderate, sustainable growth.
• Is the EU Heading for a Steady State Economy? My forecasting models predict that a steady state provides the most likely future attractor path. Google AI doesn't think so.
• Was it a mistake for Britain to enter the EU? The typical question asked right now is whether Britain should have exited the EU (Brexit). However, the period after the Maastricht Treaty (1992) that founded the EU was a period of unsustainable growth that eventually returned Britain to the attractor path around 2010. A decade of "poor" growth before Brexit in 2020 was simply a return to the attractor growth path, not failure.
• Is Another EU Recession Likely? Yes, if growth exceeds the attractor path.
• Has the EU Given up on Climate Change? Evidently, the EU decided in 2020 to give up "fixed climate targets". However, CO2 emissions are forecast to decline well after 2040.
• Future Geopolitical Alignment Forecasts for the EU also suggest approach of the Steady State. Some geopolitical alignments (with the US and the World System) predict collapse of the EU. The best forecast, although it is not for unlimited exponential growth, is for  Business-as-Usual (BAU).
• How does the EUL20 BAU Steady-State Economy Model work? Not in ways that are envisioned by Modern Economic Theory but that are easily explained by Systems Theory.
• World System Steady State and Collapse The only stable, steady state future for the World System is dominance by Europe. Right now, competition between the major Hegemonic contenders (the US, Russia and China) might not produce a steady-state Future.

The graphic above shows the State Variables for the EUL_20 Model. Three State Variables (EU1, EU2 and EU3) explain 99.6% of the variation in the underlying indicators (see the EUL20 Measurement Model below). EU1 is (Overall Growth) forecast to reach a steady state around 2050. EU2 is the Historical Emissions Controller which will continue to decline. EU3 is the Unemployment Controller which, after cycles in the late 20th Century, is forecast to be at equilibrium in the future.

Notes

Harrington, G. (2022) Five Insights for Avoiding Global Collapse

You can run the EU_L20 Model (here) along with a number of other models for EU Countries. Explanations for data sources and how the models were constructed can be found in the Boiler Plate.

ChatGPT

More Video 

 

Wikipedia

• Post-Growth an umbrella term that refers to a broad family of economic, ecological, and political perspectives responding to the limits-to-growth dilemma—the recognition that infinite economic growth is biophysically unsustainable on a finite planet.
• Degrowth an academic and social movement aimed at the planned and democratic reduction of production and consumption as a solution to social-ecological crises.
• European Union (EU) a political and economic union of 27 member states that are located primarily in Europe.
• Brexit a portmanteau of "Britain" and "Exit") was the withdrawal of the United Kingdom (UK) from the European Union (EU)
• Maastricht Treaty (1992) the foundation treaty of the European Union (EU).
• Steady State Economy an economy made up of a constant stock of physical wealth (capital) and a constant population size. In effect, such an economy does not grow in the course of time.
• Economy of the European Union
• History of the European Union
• Politics of the European Union
• Council of the European Union 
• Institutions of the European Union
• Tipping Point thresholds that, when exceeded, can lead to large changes in the state of the system

The biggest Security problem facing the EU is Russian Expansionism. For more background, see my Blog Roll: Russia. The Russian Economy is highly cyclical and might well collapse (again) in the next few decades. However, integration of Ukraine in the EU will remain a problem as long as Russian Expansionism continues (see my Blog Roll: Ukraine).

Will the UK decide to return to the EU? See whether my Blog Roll: UK will help you make a forecast.

Do you think the EU-LA Free Trade Zone will help either the EU or Latin America? See my Blog Roll: Latin America.

EU_L20 Measurement Model

Three components in the EU_L20 state space explain 99.6% of the variation in the indicator variables: EU1 = (Overall Growth), EU2 = (CO2 - LU) an Environmental-Unemployment Controller and EU3 = (LU - Q) an (Unemployment - GDP) controller.

EU_L20 BAU System Matrix

The EU_L20 System Matrix is stable, meaning that the system will eventually reach a steady state.

Google AI

Blog Roll: Venezuela

April 18, 2026  Maduro Is Gone, and the Purge Has Begun

April 10, 2026 Can Venezuela Recover Maybe? Treacherous!

Feb 10, 2026. Crisis in Venezuela: An Uncertain Future (full documentary) | FRONTLINE (PBS) YouTube Video

Jan 3, 2026. TRUMP INVADES VENEZUELA The New York Times is providing live updates here. My models (e.g., the VEL20 model, Latin American Regional Models and links below) suggest that the invasion and the aftermath (Trump claims the US will run the country) will not end well and are not in the best interests of Venezuela.

October 2025. Venezuela is currently in the News because the US appears to be planning an invasion of the country. Wikipedia notes (here) that "With the turn of the 21st century, the Venezuelan economy has been in a state of total collapse since 2013."

Here are some background forecasts from my VEL20 model and a model of the Latin American Region: 

• Eight Growth forecasts for Venezuela Maybe not surprisingly, the best growth options involve no Geopolitical Alignments for the country. Alignment with the US is worse than a Random Walk.
• Inflation in Venezuela The best option to control inflation, maybe in this case surprisingly, is to increase Globalization.
• Predicting and Controlling Hyperinflation in Venezuela It is not easy but has to be gotten under control by current and future administrations in Venezuela.
• Venezuela Growth Forecast Without external interference (for example, a US invasion), the Venezuelan economy is predicted to reach a steady state after 2100.
• Latin American Futures Latin American has a somewhat different future from Venezuela, but Geopolitical Alignment with the Latin American region is another policy option for Venezuela.
• How will US Military Action affect the Economy of Venezuela? Not well!

Activities within Latin American and within the MAGA movement suggest that events in Venezuela and in the US are changing quickly and cannot be easily predicted. Hopefully, historical models and forecasts will make events that happen in the future somewhat more understandable.

You can experiment yourself with the VE20 model using an R-code simulation (here). To understand how the statistical models are created and estimated, see the Boiler Plate. 

Exercise: How will the negative shock of invasion affect the state of the country (see the last line of code in the VE20 model)?

 Background

• 2026 US Invasion of Venezuela
• Proposed Invasion of Venezuela 
• US 2025 National Security Strategy particularly the revival of the Monroe Doctrine
• Crisis in Venezuela
• Economy of Venezuela
• Hyperinflation in Venezuela
• Economic History of Venezuela
• Politics of Venezuela
• How it All Went Wrong in Venezuela Aljazeera Documentary
• Google AI

US Planned Invasion

US Extraction of Maduro

Malthusian Crisis in Ethiopia?

 

Wasn't Malthus Wrong?

The PBS NewsHour is reporting (here) that "millions ... [in Ethiopia] ... still face the risk of starvation as a result of drought conditions", even though the Civil War ended in November, 2022. The last time Ethiopia faced famine was in 1984. Last March, the World Food Program and the USAID suspended food deliveries because grain was being stolen, sold on the black market and not getting to those in need.

Why should I even bother trying to apply a Malthusian model to Ethiopia (ETH) when Nobel Laureate William Nordhaus and most of the Economics profession argue that a Neoclassical General Equilibrium model (the DICE model) apples to every region of the World-System and, supposedly, to every country in the World-System. Critics will argue that I am just trying to push the conventional Malthusian policy conclusion: Ignore the poor and hungry because feeding them will just increase their birth rate and further increase population pressure.

World-Systems Theory (WST) has an answer to the question of what is the appropriate model to apply to a particular country: It depends on the country's place in the hierarchical structure of the World-System. Is it a Core, Semi-peripheral or Peripheral country? Core countries are mostly Capitalist, Semi-peripheral countries are Mixed with some elements of Capitalism and Peripheral countries are, I would argue, Malthusian-agricultural economies living on the edge of repeated food crisis and domination by core and semi-peripheral countries.* Most readers will understand what a Capitalist or Mixed economy is because they live in one. But what is a Malthusian economy?

Thomas Robert Malthus (1766-1834) was an English economist, cleric and scholar (political economy and demography). He predicted, controversially, that if population growth exceeded the productive capacity (carrying capacity) of the economy, a Malthusian Crisis would result, where "positive checks" such as famine, war, drought, immigration, etc. would reduce population pressure. Only "preventive checks" (birth control, delayed marriage, etc.) would prevent these catastrophes because population growth would, if uncontrolled, always exceed the productive capacity of the economy.

Famines have occurred periodically in the history of Ethiopia according to records dating to the 9th Century. To say why these famines happened and that they are definitely not the result of population pressure would be amazingly arrogant. And, to say that Neoclassical Economic Theory applies to all countries and to all recorded history would be equally arrogant. In fact, none of the modern models can be tested on Ethiopia because, aside from sparse World Bank data after WWII (the WDI or World Development Indicators), data is very weak for Ethiopia (although there is more data for regions in Africa but still not enough to test the regional DICE model).

Still, Karl Marx (1818-1883) called Malthus' population principle a "libel on the human race" and Malthus himself the "reverend scribbler." Indeed, "every schoolboy knows that Malthus was wrong" (Benjamin Higgins, 1968). Julian Simon (1932-1998) has argued that the World's carrying capacity is essentially unlimited. On the other hand, Jared Diamond has documented that the Rwanda Genocide was the result of population pressure. Why is Malthusian Theory so controversial and requires current analysts to keep writing Why Malthus Is Still Wrong. The continuing confusion involves failing to differentiate between the "Malthusian Model," the evidence supporting it, the "Malthusian Policy Recommendations" and the World-System. This particular Model-Evidence-Policy-System confusion, however, is true of every mental or formal model and is worth understanding for the well-documented and simple Malthusian Model.

The Malthusian Model (MM) is the model on which all other models are implicitly based (see Table I). Usually population growth is taken as exogenous because Capitalist economies can accommodate the demands of an expanding population. The original MM was simply two equations: a linear one for production growth, Q, and a geometric one for population growth, N. The equations didn't interact as a system** and when growth in N exceed Q, a Malthusian crisis was triggered. Kenneth Boulding put (Q,N) together in a system, with no assumptions about functional forms, and we have the modern version. The MM System model uses the state of the system S=(Q-N) as an Error-Correcting Controller (ECC); when (Q>N) population can expand (a feedback effect) and when (Q<N) population will contract through "positive checks".

Measuring Crisis

The MM Systems Model can be estimated for Ethiopia after WWII using the WDI to determine the state of the Malthusian Crisis. The first step is to estimate a measurement model using data we have from the WDI. N and Q are the most complete series and, luckily, form the basic Malthusian model.

 Measurement Matrix 

      N     Q

[1,]  0.707 0.707

[2,] -0.707 0.707

 Fraction of Variance 

[1] 0.958 1.000

The Measurement matrix can be estimated using Principal Components Analysis (PCA). The components will be used to form the approximate state variables of the Malthusian System. When estimated, the first component is overall growth (ETH1 = 0.707 N + 0.707 Q) and the second component, the Error Correcting Growth Controller (ETH2 = 0.707 Q - 0.707 N). Growth explains 96% of the variance and the ECC explains 4%.

The Figure above shows ETH1 (Growth) and ETH2 (The Malthusian ECC) plotted over time. ETH2 enters negative Malthusian-Criss territory around 1990 and starts recovering after 2010 (the 1983-1985 Famine was the worst in a Century and started the downward slide in the Malthusian Crisis). Overall growth (ETH1) although wiggling a little over time was not permanently affected.

Typically, commenting on historical time plots is as far as historical analysis gets, Malthusian or not. But I want to estimate a system model and try to understand how trends are causally related. 

Modeling Results

Modeling forces the question of "What is the System?" World Systems Theory (WST) provides a framework for answering the question. Ethiopia (ETH) is a country embedded with in a system of other countries. 

Discussion

NOTES

* My identification of Ethiopia as a Peripheral Country is a little casual and can be debated (see Babones, 2005). In studying the WDI, one indicator of Peripheral status is simply the lack of information in the data set. Semi-Peripheral and Core countries are fully populated with data.

** We might criticize Malthus for not inventing Systems Theory (a Twentieth Century discovery) and Marx came close recognizing that social systems are "over-determined" (Wolff and Resnick, 2006). You can read more Marx and Engels on the Population Bomb here. Unified Growth Theory puts all these various approaches together in one model starting with the MM at low levels of growth or stagnation (the Malthusian Trap) and ending with the Steady State Economy.

Appendix: ECC Models

Appendix: Systems Model

Models have a compact R-code in dse and can be run easily in Snippets. Note that the RUL20 model is only unstable in the feedback components $F[3,3] = 1.03$. If you stabilize the third feedback component (e.g.,$F[3,3] = 0.98$)  the entire system is stable. 

===========

merge.forecast <-

function (fx,n=1) {

#

# Merges a forecast with the output data

x <- splice(fx$pred,fx$forecast[[n]])

colnames(x) <- seriesNames(fx$data$output)

return(x)

}

#

#

# RUL20  Russia (1950-2000)

#

# Measurement Matrix 

#    EN.ATM.CO2E.KT EG.USE.COMM.KT.OE NY.GDP.MKTP.KD SL.TLF.TOTL.IN SP.POP.TOTL

#[1,]        0.28209            0.4060         0.3336         0.4343      0.3721

#[2,]       -0.43993           -0.2199        -0.1359         0.1328      0.2266

#[3,]        0.06433           -0.1446         0.5944         0.0494     -0.3944

#     SL.UEM.TOTL.ZS     HDI      EF    KOF

#[1,]         0.1893 0.43400  0.2348 0.1948

#[2,]         0.4971 0.03409 -0.3950 0.5161

#[3,]        -0.3374 0.22538 -0.4878 0.2470

#

 #Fraction of Variance 

#[1] 0.5489 0.8484 0.9677 0.9814 0.9921 0.9975 0.9988 0.9995 1.0000

require(dse)

require(matlab)

AIC <- function(model) {informationTestsCalculations(model)[3]}

f <- matrix( c( 0.976658001, 0.02127754,  0.2249071, 0.161990376,

                     -0.008392259, 0.97543675, -0.2319674, 0.001666581,

                     -0.005587383, 0.09718186,  1.0312754, 0.035854885,

                      0.000000000, 0.00000000,  0.0000000, 1.000000000

),byrow=TRUE,nrow=4,ncol=4)

h <- eye(3,4)

k <- f[1:4,1:3,drop=FALSE]

RUL20 <- SS(F=f,H=h,K=k,

z0=c(0.161990376, 0.001666581, 0.035854885, 1.00000000),

              output.names=c("RU1","RU2","RU3"))

stability(RUL20)

#tfplot(simulate(RUL20,sampleT=20))

shockDecomposition(toSSChol(RUL20))

RUL20.data <- simulate(RUL20,sampleT=50,start=1950,noise=matrix(0,50,3))

m <- l(RUL20,RUL20.data)

#tfplot(m)

AIC(m)

tfplot(RUL20.f <- forecast(m,horizon=50))

RUL20.fx <- merge.forecast(RUL20.f)

#    Models have a compact R-code in dse and can be run easily in Snippets. 

#    The RU20 must be run first to provide input for #ETH20.

#

# W20 ETH (Ethiopia) Russia Input

#

# Measurement Matrix 

#       N  Q

#[1,]  0.707 0.707

#[2,] -0.707 0.707

#

#Fraction of Variance 

#[1] 0.958 1.000

#

require(dse)

require(matlab)

AIC <- function(model) {informationTestsCalculations(model)[3]}

f <- matrix( c(  1.04647269, -0.1059723, 0.10155553,

                        0.01918655,  0.9306230, 0.01335861,

                  0.000000000,  0.00000000,  1.00000000

),byrow=TRUE,nrow=3,ncol=3)

g <- matrix(c(-0.003819938, -0.01406381, 0.009235749,

                     -0.010773904, -0.01627134, 0.017135870,

                      0.000000000 , 0.00000000, 0.000000000

),byrow=TRUE,nrow=3,ncol=3)                      

h <- eye(2,3)

k <- f[1:3,1:2,drop=FALSE]

ETH20 <- SS(F=f,H=h,K=k,z0=c(0.11991149, 0.04457381, 1.00000000),

              output.names=c("Growth","(Q-N)"))

stability(ETH20)

shockDecomposition(toSSChol(ETH20))

ETH20.data <- simulate(ETH20,sampleT=50,start=1950,noise=matrix(0,50,2))

m <- l(ETH20,ETH20.data)

#tfplot(m)

AIC(m)

tfplot(forecast(m,horizon=50))

ETH20x <- SS(F=f,H=h,K=k,G=g,z0=c(0.11991149, 0.04457381, 1.00000000),

              output.names=c("Growth","(Q-N)"))

ETH20x

data <- TSdata(output=outputData(ETH20.data),input=RUL20.fx)

m <- l(ETH20x,data)

#tfplot(m)

AIC(m)

shockDecomposition(m)

tfplot(forecast(m,horizon=50,conditioning.inputs=RUL20.fx))

Blog Roll: Colombia

 

December 15, 2025. A recent article in Foreign Affairs caught my attention: The Needless Rift between America and Colombia: How to Rescue Washington's Most Important Partnership in Latin America. The article concludes that four areas might be emphasized to repair the relationship: drugs, migration, Venezuela, and Chinese influence. However, the subtext is that not much can happen during the current Trump II Administration. The article is well worth reading.

I have a model of the current Colombian Economy  (COL20, here) and other models of Latin American countries here and summarized here. 

Posts

Current models of the Colombian Economy and Others:

• Unstable cycles in Colombia
• Colombia's Globalization Bubble
• Six Futures for Colombia
• How Does the Economy of Colombia Work?
• Blog Roll: Venezuela 
• Blog Roll: China
• Blog Roll: The United States
• Blog Roll: Latin America
• Blog Roll: The World System

Blog Roll: France

 

MSC 2026 WATCH: France’s Macron says 'Europe has to learn’ to be a geopolitical power in Munich (video above)

Sept. 9, 2025  The French government has collapsed again "less than 24 hours after its formation" (here). It seems like a good time to look back at what I have found about the French Economy:

• Forecasting the Great Depression in France France was changed by WWI and reacted very conservatively to the Great Depression, making forecasting difficult.
• How is the French Labor Market Controlled? The role of World Markets for Agriculture and Oil.
• 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.
• La French TECH Cycles unlike Schumpeter's Creative Destruction cycles are stable.
• 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.
• Six Futures for France A Steady State Economy or Growth-and-Collapse will not be accepted without Protest.
• World System: Steady State or Collapse The World System itself may be moving toward a Steady State 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.
• France in the Long Sixteenth Century Geopolitical Linkages between France and England have always been important historically.
• France (1450-1540) The Balance of Power System (Spain, France and England) began failing during this period.
• The French Revolution A Bourgeoise Revolution driven by the Urbanization Controller.

There is certainly a lot more to learn about the French economy. The important conclusion, at this point in my research, is that France might be heading toward a Steady State Economy which will lead to a period of World-System Chaos before government's learn to deal with the end of growth or Environmental Collapse or are able to discover new growth technologies through Schumpeter's Creative Destruction.