World-System(1950-2000) A Deep Dive into the Iranian State Space

 


In prior blog postings, I have usually displayed only the first three state variables of a DCM (Dynamic Components Model). There are three reasons: (1) Typically, the first three state variables explain at least 90% of the variation in the underlying indicators. For example, in Iran (see the Measurement Matrix below in the Notes) the first three components (IR1, IR2, IR2) explain 98% of the variation in the underlying indicators. (2) Also, typically, the first state variable describes overall growth in the system and the next two state variables describe historical cycles and feedback controllers (here and here). And, (3) it is difficult to explain the dynamic path of state variables in more than three dimensions.

However, interesting dynamics are observed in the lower-order state variables. In the graphic above, the state space IR4, IR5 and IR6 is displayed. The graphic above shows the unstable, cyclical dynamic state-space interaction between IR4=(a Population-Resource controller), IR5=(an Environmental-Economy controller) and IR6=(Human Development-Employment Controller). Movement on the graph is from the center outward. 



The remaining three state variables, IR7-IR9 (graphed above), also have mild cyclical dynamics and are theoretically interesting (IR7=a Employment-Resources-Globalization Controller, IR8=An Emissions-Energy Controller and IR9=a Population-Employment Controller). They just explain an insignificant amount of variation.

Macrosocioeconomic systems are very complicated: everything is related to everything somewhere in the system. Policy measures that try to improve minor feedback controllers will have little overall impact on the system.

Notes



The first state variable (row of the Measurement Matrix, IR1) describes overall growth in the Iranian Economy. The second state variable, IR2, describes  Unemployment and Globalization, (IR2 = 0.9091 SL.UEM.TOTL.ZS + 0.335 KOF) and the third state variable, IR3, is an environmental-globalization feedback controller, (IR3 = 0.827 KOF - 0.3878 SL.UEM.TOTL.ZS - 0.258 EF - 0.217 EG.USE.COM.KT.OE), for unemployment, ecological footprint and energy use.

The next three state variables (rows of the Measurement Matrix) describe (1) a Population-Resource controller IR4 = (0.60541 N + 0.5104 HDI - 0.32993 GDP - 0.3036 EG -  0.2797 CO2 - 0.243 EF), (2) an Environmental-Economy controller IR5 = (0.731 EF + 0.21639 GDP - 0.5199 CO2, - 0.3020 EG - 0.21948 L) and (3) an Human Development-Employment Controller IR6 = (0.4050 HDI + 0.31822 GDP - 0.74027 N). Together, these feedback controllers only explain about 0.005% of the variation.

The final three state variables describe (1) an Employment-Resources-Globalization Controller IR7 = (0.64207 Q + 0.44614 L - 0.297 EF -0.2962 EG - 0.28808 KOF), (2) an Emissions-Energy Controller IR8 = (0.6428 CO2 + 0.247 EF  - 0.6843 EG), and (3) a Population-Employment Controller IR9 = (0.62266 N + 0.39963 GDP - 0.5687 HDI  0.2119 EG). Although these might be theoretically interesting controllers, they explain an insignificant amount of variation.



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