World-System (1950-2142) How Does the Economy of Russia Work?


I continually encounter articles suggesting that the Russian Economy is in collapse mode (see the Readings below). Google AI reaches a similar conclusion:


My own model of the Russian Economy is strongly cyclical and unstable (see graphic at the beginning of the post, the RUL20 model, and my Blog Roll: Russia) and is expected to start collapsing again around 2050.**  

This post is devoted to explaining how the RUL20 BAU model works.

The state space has an Overall Growth Component (RU1), a Globalization-Energy Controller and a GDP-Malthusian-Unemployment Controller (see the RUL20 Measurement Matrix below). The Overall Growth Component and Controllers make sense from the standpoint of the Economy of Russia. Russia is a petrostate with a large land area and twelve economic regions. The Moscow economy is the largest among the Russian Federation and, historically, decision making has been concentrated in the Kremlin. Conditions in regions such as Siberia are particularly Malthusian. ChatGPT reports that:


From the RUL20 System Matrix (below), the source of instability in the system is the RU3, the GDP-Malthusian-Unemployment Controller.



The RU3 Controller is somewhat out of phase with Growth an the RU2 Controller menaing that as negative shocks work through the system, GDP-Malthusian-Unemployment problems become worse for the country affecting Human Development (HDI), Unemployment (LU) and Globalization (KOF).

In terms of negative shocks in the Post-War period, ChatGPT reports the following:



The unstable cyclicality displayed by the RUL20 Model is unique, at this point, among the World-System models I have estimated. You can experiment yourself with the RUL20 BAU model and see what the effect of stabilizing the system (instructions in the code) are.

From the AIC Statistics (below) you can see that the TECHP (Technical Productivity) is the best. It also turns out the Geopolitical alignment with the EU provides an important attractor path.  I will explore these models in future posts.

For my other posts on Russia see the Blog Roll here.


Notes

** A casual understanding of Russian History covering WWI, The Russian Revolution, WWII, the Cold War and the Fall of the Soviet Union supports the cyclicality finding.

Readings

RUL20 Measurement Matrix

Three components in the RUL20 state space explain 96.8 % of the variation in the Indicators. The components are: (1) RU1 = Overall Growth, (2) RU2 = (0.516 KOF + 0.497 LU + 0.227 N - 0.4399 CO2 - 0.220 EG - 0.395 EF) Globalization-Energy Controller, and (3) RU3 = (0.594 GDP + 0.2254 HDI + 0.247 KOF - 0.394 N - 0.337 LU) GDP-Malthusian-Unemployment Controller.

RUL20 System Matrix


The Systems Matrix is unstable and cyclical. The instability is created by RU3 (The Malthusian-Unemployment Controller) which also creates cyclicality (F[2,3] = -0.3219674).

RUL20 AIC Statistics

The best model is the RU20_TECHP model while the RU20_EU model and the RU20_BAU model are in second place.



 







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