World System Growth Paths

  The concept of a  Steady State Economy  seemed reasonable to the  Classical Economists  but the idea was abandoned in the 20th Century when  Neoclassical Economists  fell in love with unlimited  exponential growth .  Peddling Prosperity  is the key for Policy Entrepreneurs to gain access to political influence. No politician can stand up (successfully) and peddle  Limits to Growth . And, once a political system ( particularly at the local level ) is on the  Growth Treadmill , there is no getting off until the system collapses. From the perspective of  Systems Theory , however, a steady state is just one of  a number (seven to be exact) of Growth Paths  that systems models can generate when there is no random variation input.  Systems Theory  treats the  Steady State Economy  as a testable prediction rather than an inevitability. Looking at the World System being driven by...

  Notes The first six indicators in  standard scores  are taken from the  World Development Indicators  (WDI). KOF =  KOF Index of Globalization , EF =  Ecological Footprint , HDI =  Human Development Index .  State Space Model Estimation The Measurement Matrix for the  state space models  was constructed using  Principal Components Analysis  with  standardized  data from the  World Development Indicators . The statistical analysis was conducted in an extension of the  dse package . The package is currently supported by an online portal ( here ) and can be downloaded, with the R-programming language, for any personal computer  here .  Code for the state space  Dynamic Component models (DCMs)  is available on my Google drive ( here ) and referenced in each post. Atlanta Fed Economy Now My approach to forecasting is similar to the  EconomyNow model used by the Atlanta Federal...

There are six growth modes (graphic above) that can be generated with the Leibenstein Equation : Where Q is Aggregate Output ( GDP ), N is Population, c are constants to be estimated by Principal Components Analysis ( PCA ) and S is the system state . The Leibenstein Equation is a realization of the Malthusian Model . In Systems Theory, the Leibenstein Malthusian Equation is an historical controller, in this case for population growth.  The  Leibenstein Malthusian Equation  can be generalized in the table above to include many other possible controllers that can be emphasized within an Economic system over a particular time period. For example, (Q-P) is the Liberal Market Controller and (Q-L) is the Marxian Labor Controller. Which controller dominates over a specific historical period is a matter for statistical estimation, an important strength of the Generalized Leibenstein Equation. This blog presents various growth modes...