The global economy isn't a scale seeking balance; it's a particle trapped in a geometric cage.
April 15, 2026
Original Paper
Stability without Equilibrium: The Phase-space Geometry of Monetary Architecture
SSRN · 6455218
The Takeaway
Standard economics teaches that markets always strive for 'equilibrium,' like a pendulum naturally returning to the center. This paper throws that out, arguing that modern monetary stability is actually about 'phase-space geometry.' The system doesn't 'return' to health; it just stays confined within a narrow 'survival region' that prevents total collapse. If the economy drifts out of this specific geometric shape, the rules of the game change entirely. For regular people, this means our financial safety depends more on mathematical boundaries than on the 'invisible hand' of the market.
From the abstract
Modern advanced economies operate under a bank-centred monetary architecture based on credit creation. We study the stability of this system by mapping macro-financial dynamics into a reduced geometric state space. The resulting phase-space representation reveals a striking regularity: the system operates within a compact survival region, while systemic crises appear as temporary excursions outside this domain. Local drift reconstruction shows no systematic centrifugal dynamics pushing the syste