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Monetary Policy and Income Inequality: A Nonlinear Dynamical Systems Approach
Fisher College, Boston, MA, USA
- 1 Fisher College, Boston, MA, USA
Theoretical Economics Letters·Volume 15 (2025)·Pages 349–362·Published 28 March 2025·DOI10.4236/tel.2025.152019
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Abstract
This paper develops a nonlinear macroeconomic model to analyze how unconventional monetary policy (QE, negative interest rates) exacerbates income variability through asset price inflation and wage stagnation. Using differential equations, bifurcation analysis, and empirical calibration to U.S./EU data (2008-2023), I demonstrate that central bank interventions create fractal instability in the wealth distribution. Results reveal a critical threshold beyond which fiscal inequality becomes irreversible without fiscal redistribution. The study integrates Minsky’s financial instability hypothesis with Keen’s debt-driven collapse frameworks, offering policy prescriptions for mitigating systemic risk.
KeywordsMonetary PolicyIncome InequalityNonlinear DynamicsBifurcationMinsky Moment
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