Dec 24, 2025. The New York Times is reporting (here) that "for the second consecutive year ...[France has failed]... to agree to a new national budget by the end of the legislative calendar." It is difficult to understand what is going on in France without some historical background, specifically how France responded to World War I and the Great Depression. ChatGPT reports that
In this post, I am going to use France's economic statistics in the Long 19th Century to forecast Frances economic performance in the early 20th Century. The multi-model forecasts based on different input assumptions for the FR19 Model are presented in the graphic at the beginning of this post. The results are somewhat surprising!
I looked at the following possible drivers for the French Economy: (1) None (Business-as-Usual, BAU, and Random Walk, RW), (2) Technical Productivity, TECHP, (3) the World System (W), (4) Western Europe (WE), (4) Germany (DE) and the United States (US). The best model, using the Akaike Information Criterion was US input ([-1215 < AIC = -1138 < -1077]). All the models were unstable (some were cyclical, see the Eigenvalues below in the Notes with the AIC Statistics) and collapsed (except the RW) at some point in the Early 20th Century.
We know from the historical record that the French Economy did not collapse as a result of shocks from WWI, the Great Depression and WWII. How are we to understand the forecasts from the 19th Century Models?
You can stabilize the FR19 BAU model with instructions in the code (here).
Notes
AIC Statistics
Measurement Model
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