Friday, March 20, 2026

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.



Israeli Peace Process



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 and highly cyclical.

IL_L20 AIC Statistics


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

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...