11/5/17

I don't care what the facts are

Precursor of the post-truth era 

11/1/17

will we remeber current problems in 25 years?

I guess that all current problems, clashes and overall turbulence, even if everything goes wrong way, will not be any important part of political/social/private life in 25 years. There are fierce discussions (even small wars) of most sensitive local/regional/global issues between great, not so great and small countries and organizations. It seems so much important to us. However, historically speaking this is just noise. People do not consider Nazism and concentration camps as a part of everyday lives any more. It is just sad history to remember to the date and it should not happen again, if possible. This was by far the worst crime against humanity.   

10/31/17

Did North Korea test tectonic weapon?

The Democratic People's Republic of Korea (DPRK) conducted 6 underground test, with  the last 5 from 6 in the same mountain. The biggest (sixth) event conducted on September 3, 2017 (DPRK6) had magnitude (mb=6) and resulted in visible landslides and also was followed by a few aftershocks with magnitudes between 2.4 and 3.4. Two of them occurred on September 23 (around 4:40 and 8:30 UTC) and are likely were reported today as the cause tunnel collapse and casualties. The test conducted on September 9, 2016 was also followed by a small aftershock well described in our paper (https://arxiv.org/abs/1611.03055 or https://link.springer.com/article/10.1134/S1028334X17030011 ), which is very similar to the aftershocks of the DPRK6.
Among many challenges in the analysis of various physical measurements related to the DPRK test is the absence of measurable levels of radioactivity after 4 from 6 events and just minor traces of radioactivity after the other two.  Very deep placement of warheads can prevent radioactive gas venting and  thus provide effective containment of radioactive debris,  Let's consider two possibilities alternative to nuclear testing. 
Having the last event equivalent to about 100,000 tons of TNT, one can reject the hypothesis that this DPRK test was a chemical blast. An alternative explanation would be testing of tectonic weapon, as introduced by Russian geophysicist V. Nikolayev in 1992. There are several physical mechanisms that can be used to facilitate effective release of pre-existing tectonic energy and generation of seismic waves. In any case, the mountain is exhausted after five tests and no more tectonic release is possible.  I do not believe that tectonic weapon can be as efficient as we observed in six DPRK events. In case it does exist this is an additional threat for the peaceful world. 

New traction in modern society: an economic model explaining the overall turn in elections and voting



There is an old economic model describing optimal behaviour of an agent in a company. A company is a close system and any person obeys rules or goes out. Therefore, one always needs to define own position and estimate optimal strategy maximizing profit/utility. There are two general opportunities to increase income – make herself more visible for decision makes (PR) or increase productivity. Competition between agents has to directions, but everybody has finite time to share between two activities – H. As everyone knows, people have different PR (PR) and work (W) capabilities (smile). Let’s the share one invests in PR is a, and then (1-a) is the time slot available for productive work. For a given person j, total income, M, in a company is defined by
Mj =  a*H*PR + (1-a)*H*W – G
where G – overhead, i.e the money spent to administration and so on.  The optimal strategy is based on the ratio of PR/W for this person and on her PR relative to other people in the company. When one has low PR the strategy is simple – make a=0 and get the small share of own productive work redistributed over the company. For the PR guru – work is not needed too much. Ceteris paribus, the company grows when people make correct decisions maximizing company and own profit/income. But everyone can leave unsuccessful company and try a new one.
At the level of nation-state, one cannot leave (or it is much harder) and has to find new ways to fight against increasing economic and social disparity, which we observe in many modern societies based on simple economic efficiency of investment.  In a country, G now is the money spent to run the government and political system. As a rule, these are people with the highest PRs and obtain income from their tongue work. They are supported if not bribed by investors. As economic data show, more and more people do not get any increase in M with growing productivity and even growing, e.g. the median real personal income has not been growing in the US since the 1980s. More than 90% of real GDP increment goes to top 1%. As we know, one cannot move to another country.
Here an alternative strategy comes – to counteract the increasing disparity or to put some sand in the wheels of political and economic system. When political /economic leaders in the UK spoke about lost billions, everybody knew who would loose them.   This was not sad news.  Bigger and bigger parts of many developed nations signal to the other part that they forget something – the roots of human rights. The above equation has to be extended by a new term – the counter force hampering the prosperity of PR part of the society – the main liberal idea:
Mj =  D*a*H*PR + (1-a)*H*W – G

where D is damping coefficient decreasing the efficiency of PR. With the overall slowdown of economic growth, the level of economic/social inequality may not grow so fast as during the two previous decades. D is likely proportional to the failure of the current elites in election process. Overall, many people are not happy anymore and look for alternative ways not to lag behind forever.

10/30/17

The European Union creates economic and social conditions for disintegration of mid-sized member states

The most recent referendums in Spain and Italy is a clear signal that mid-sized European economies are subject to disintegration because their nation-states give no benefits any more to their most developed parts. Two biggest states, Germany and France, (the Great Britain is out of the EU processes) have to retain their nation-states (despite separatism of some regions within these countries) because of potential loss of power in EU and global processes. To some extent these two countries are equal to the EU by political power  - France is one of five permanent UN Security Council members and Germany is the largest exporting economy.  
Smaller states have no influence on the most important decisions but may take all advantages of financial and labour redistribution and enjoy safety. Moreover, many of them are single-nation and have no social and historical cracks to disintegrate.  
The disintegration of Spain and Italy is predetermined by the internal mechanisms and structures of the EU, where the overall payment into the EU funds would be smaller for the separated highly developed regions than the payment to the capitals of their mother-states. At the same time, the EU provides the full spectrum of services of a nation-state. Hence, there are less economic/social/national/ethnic/… reasons to keep formal links in a current state - the EU replaces them and it is its goal. The biggest countries are also interested in such disintegration giving them more power. The smallest countries might have own benefits due to stronger lateral links with like. 

In addition, such disintegration is actually not diintegration at all. This is reintegration. One needs only a soft mechnism to to this.  


2/16/17

On decreasing rate of economic growth in the USA

We published a book and a few papers [e.g., 1, 2, 3] on economic growth. There are numerous plots demonstrating the decelerating rate of real economic growth in developed countries. The long-term component of real GDP increase is very simple – annual increment in real GDP per capita, rGDPpc, is a constant, which does not change with time since the late 1940s. This makes the rate of growth to be inversely proportional to the current level of rGDPpc: dln(rGDPpc(t)) = A/rGDPpc(t).  The population component is large in the USA – approximately 1% per year since the 1950s, but negative in Japan. Therefore, we use rGDPpc instead of rGDP, which is rather misleading.  
In the first paper published in 2005, we used data between 1950 and 2003 and found that the rGDPpc annual increment has a positive slope. It was considered as an indication of future problems between 2004 and 2016, which was actually observed as the Great Recession and further sluggish recovery. Figure 1 displays the original time series between 1947 and 2003 (black circles) extended by the estimated made since 2004. Instead of time, we use rGDPpc as argument. For recession periods, when the rGDPpc falls, one observes loops in the curve. Our prediction was right – the slope of the regression line has dropped from 0.02 (black linear trend line) to 0.007 (red trend line). The average increment in rGDPpc was $551 as measured  in 2009US$.  

Figure 1. Annual increment in real GDP per capita in the USA since 1947. Black circles show the period between 1947 and 2003, and red circles show the period extended into 2016. Linear trends are shown in black and red, respectively. Two regression equations demonstrate the change in slope since 2003.

There is another problem with the original rGDPpc time series borrowed from the BEA web site. It is calculated as a ratio of rGDP and total population, while only economically active population matters. Therefore, we have to correct the original  rGDPpc for the ratio shown in Figure 2. When the rGDPpc multiplied by the population correction factor, one obtains a better view on the long-term growth rate, as depicted in Figure 3. The trend in the rGDPpc annual increment is absent. This observation means that the rate of real GDP growth in the USA (and other developed countries) is decaying inversely proportional to rGDPpc. Leading economic countries will be growing at a rate of about 1.5% per year in the next 20 years. In 2016, the rate of rGDPpc growth was 0.9% per year. This mediocre growth will be accompanied by decreasing rate of population growth as observed since the earlier 2000s.


Figure 2. The ratio of total population and working age population (16 and above). The rGDPpc is corrected (multiplied) by this ratio.  



Figure 3. Same as in Figure 1, but for the population corrected rGDPpc.

1/22/17

Trump - a peaceful path to a more balanced world

Some commentators say that Trump puts an end of global order.  Not getting into  details of a number of wars, global terrorism and tension between West and East, I would guess that the " global order"  was not about peace and dignity but just an opinion of a few people, who ignored, as we know now, views of various majorities. Trump is not their candidate because he directly expresses what the majority dreams. The division of nations, alliances, and the whole world roots in ignoring and ignorance. Trump gives us a hope that the world can regain the overall balance, where all people and countries have individuality and voices (people are not deplorable). Thanks, American people. 
I would propose to nominate  Trump for the Nobel Peace Prize. Stability may come back, but the dark forces are still dangerous and aggressive.