A Steady State Economy for Italy
Italy has been called The Sick Man of Europe simply because growth is slowing. The name-calling is based on the assumption that economies are supposed to grow forever. In a finite planet, the assumption is unreasonable. From the IT_L20 Model , Italy is forecast to be approaching a Steady State Economy after 2045 (see the graphic above). Why is this happening and is it a Success or a Failure ? The simplest answer is that overall growth rates for the IT_L20 Model are stable (Largest eigenvalue < 1.0--see below). A stable economy will always reach a steady state. If the historical controllers are also stable (and they are in Italy), then the steady state can be maintained indefinitely. However, the relationships between the indicators in the historical controllers are quite complicated and will be a challenge for Italian politics. Consider the following expansion of the Kaya Identity as a Directed Graph : There are lots of questionable effects within the mo...