Cycles and Steady State in Israel

The Conventional Wisdom is that Israel's relationship with the United States is a Geopolitical Necessity.

Unfortunately, the persistent attempts at Peacemaking (see the Israeli Peace Process below) have created a stable cycle of attention and then indifference within the US. The cycle is quite clear in the IL_L20 US-Input Model (graphic above).

The Phase Space for the IL_L20 US-Input Model is presented above. The Component State Variables (IL1, IL2 and IL3) are defined in the Measurement Matrix below. The State Space Dynamic Components model is also displayed in the Notes Below. The model is nonlinear, cyclical and stable.

The period after WWII was one long cycle peaking in the 1990s (see time plot below).** The future (in the Phase Space above) is projected to be one of continuing stable but large cycles.

The AIC Statistics (in the Notes below) show that the short-term is best thought of as a Random Walk (RW) while the IS_L20 US-Input model is a strong long-term competitor (see below).

 

Notes

** The were developments in the 1990s favoring the Economy of Israel (particularly in-migration) and developments in the 2000s (the Dot-Com Bubble) which crashed the heavily tech-dependent economy.

• Economy of Israel
• Economy of the Middle-East
• History of Israel
• History of the Middle East
• World-System leader in Technological Change the Economy of Israel.
• The Myth of Israel Innovation
• Blog Roll: Israel
• Blog Roll: Middle East North Africa

Israeli Peace Process

• Abraham Accords a set of agreements that established diplomatic normalization between Israel and several Arab states, beginning with the United Arab Emirates and Bahrain.
• Oslo Accords a pair of interim agreements between Israel and the Palestine Liberation Organization (PLO): the Oslo I Accord, signed in Washington, D.C., in 1993;^[1] and the Oslo II Accord, signed in Taba, Egypt, in 1995.
• Israel-Egypt Peace Treaty following the 1978 Camp David Accords, the Egypt–Israel treaty was signed by Anwar Sadat, President of Egypt, and Menachem Begin, Prime Minister of Israel, and witnessed by Jimmy Carter, President of the United States.
• Israel-Jordan Peace Treaty an agreement that ended the state of war that had existed between the two countries since the 1948 Arab–Israeli War and established mutual diplomatic relations.
• Gaza Peace Plan a multilateral agreement between Israel and Hamas that aims to address the ongoing Gaza war and broader Middle Eastern crisis.
• Two-State Solution a proposed approach to resolving the Israeli–Palestinian conflict, by creating two states on the territory of the former Mandatory Palestine.
• Arab-Israel Normalization since the 1970s, a parallel effort to find terms upon which peace can be agreed to in the Arab–Israeli conflict and also specifically the Israeli–Palestinian conflict.

IL_L20 Measurement Model

Three Component State Variables explain over 98% of the variation in the indicators: IL1 = (Overall Growth), IL2 = (LU - KOF - EF) Unemployment Controller and IL3 = (EF + L  - KOF - HDI) Environmental-Labor Controller.

The historical time plot for the IL_L20 BAU Model is presented above.

IL_L20 US-Input Model

The IL_L20 US-Input Model is stable a highly cyclical.

IL_L20 AIC Statistics

The AIC Statistics are all closely grouped meaning that there is not one, dominant Geopolitical model.

Cyclical Collapse in the Middle East North Africa

The WL20 MEA W-Input model is cyclical, stable but i gorwth and collapse mode.

 

World Export Cycles on the Edge of Stability (World System, 1970-2100)

 

World1 Phase Space

 

World-System (1970-2100) Stable BAU Growth and Collapse Cycles in Italy

 

World-System (1950-2025) Edge of Chaos in Swirtzerland.

 

Nov 14, 2025 The New York Times reports (here) that "The United States and Switzerland said on Friday that they had reached an agreement to lower a punishing 39 percent tariff on Swiss goods to 15 percent..."

The agreement with the US was particularly important because: (1)  Switzerland has an unstable, cyclical relationship with the US and (2) There are no stable Geopolitical Alignments for Switzerland (even the BAU model, see the Notes below, requires stabilizing the Export-Employment controller).

This post looks specifically at the US and Germany (DE) economies and their impacts on the Swiss Economy.

Deterministic Chaos in socio-technical systems is a situation where a model of the system is deterministic but the future path of the system cannot be predicted because it is chaotic. I have always assumed that Chaos in social systems is so dysfunctional that it could not persist over time. Indeed, the "best" models (using the AIC), I have found, in macro social systems are often unstable but not chaotic. Here is an example for Switzerland.

Two of Switzerland's biggest trading partners are the US and Germany (DE). However, the CH_LM model driven by outputs from the USL20 and DE_LM models are on the Edge of Chaos (see the graphic above).  Here are the System Matrices for the two models:

and the Germany (DE) model:

One thing to notice is the large coefficient values. Values over 1.0 on the diagonal of the System Matrix indicate instability. Large values > 1.0 on the off-diagonal elements of the System Matrix indicate potential chaos.

I have pointed out in an earlier post (here) how the Trump II Administration is tinkering with a World Trading System it does not understand. The tinkering might involve pushing trading partners to the Edge of Chaos.

You can experiment with the CH_LM BAU model here.

Notes

ChatGPT

CH_LM Model

The CH_LM Measurement Matrix (see the Boiler Plate) has three components that explain 100% of the variance in the indicators: (1) the Overall Growth Component (93% of the variation), (2) The Export-Employment Controller (0.687 X - 0.618 HOURS, 7% of the variation), (3) The Urbanization Controller (0.547 U + 0.275 N - 0.566 HOURS - 0.446 X, >0% of the variation).

CH_LM System Matrix

The CH_LM System Matrix (see the Boiler Plate) shows that the system is unstable cyclical and the main source of instability is the Export-Employment Controller (F[2,2] = 1.02993562).

You can experiment with the CH_LM BAU model here.

World-System (1960-2150) Tech Cycles in France

 

In a prior post (here) and in prior posts on the French Economy (here), I have found that the French Economy (or at least my model of it) is approaching a Steady State. My hypothesis is that the approaching steady state might (in addition to a lot of other forces) be creating Political Instability. However, no one knows the Future and we have to entertain other hypotheses.

The current 2025 Noble Prize in Economics offers another hypothesis. History teaches us that new technologies and Creative Destruction will eventually break steady states and send Economic Systems on to new Attractor Paths. The hypothesis is the essential argument of Kondratiev Wave Theory (here) and is embraced by World-Systems Theory. An alternative forecast for France is that the Steady State will not happen due to La French TECH.

The graphic above plots two historical forms of French Technology: Productivity (TECHP) and Efficiency (TECHE) (see the Notes below). Notice that they are both cyclical (echoes of Schumpeter's Creative Destruction model which is also cyclical but unstable). Notice also that TECHP (productivity) peaks before TECHE (efficiency): once a productivity peak is reached, focus turns toward efficiency until all gains are exhausted.

Unfortunately for France, both of these technological peaks (at least in my model which is estimated from World Development Data) are going to be reached in the near future: (1) reinforcing the steady state or (2) creating more instability and a search for new technologies to put the economy on another growth path. Since we do not know the Future, nothing is guaranteed.

For more on Stable French Technology Cycles see the post here. Schumpeter's Creative Destruction model predicts unstable Creative Destruction cycles and the French Technology Cycles are stable.
 

Notes

FR TECH Measurement Models

The two types of Technological Change  (TECHP and TECHE) are explained in a post on Technology in the United Kingdom which also is a good comparison to the French Model. Essentially, TECHP is productivity (output per capita)  and TECHE is efficiency (for example, CO2 emissions relative to energy consumption).