World-System Steady State Or Collapse

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...

  From the perspective of Systems Theory (and a lot of commentary), there are three general futures for the World System: (1) Unlimited and Unending Exponential Growth , (2) Steady State Economy and (3) Growth and Collapse . My guess is that most people don't think much about these scenarios and assume that, in the future, things will continue pretty much as they have in the past (the Business-As-Usual Scenario, BAU ). Except for the short-term, BAU is the least likely scenario! This blog explores these and other scenarios using statistically estimated state-space time series models based on data from the World Bank (the World Development Indicators or WDI ) and other sources. All of these future modes of Development are considered by the Intergovernmental Panel on Climate Change  ( IPCC ) in their published Emission Scenarios (graphic above). There most likely scenarios are RCP8.5 (red line above, Growth and Steady State), RCP6 (black line, Growth and Collapse) and RCP2....