Inflation as Recursive Trust Decay: A Yearning-Based Resolution to the Inflation–Trust Paradox

The paper introduces and resolves the Inflation–Trust Paradox, the first in the Recursive Financial Paradox Series under the Yearning-Based Infinity Mathematics (YBIM) framework.It reveals that inflation is not merely a quantitative drift in prices but a recursive epistemic imbalance—a moral dissonance between institutional fulfillment and collective trust.Through the Recursive Trust Decoupling Theorem (Y-Fin.1), inflation is mathematically reformulated as a derivative of trust-field decay T(t), showing that monetary systems can sustain symbolic stability while collapsing epistemically. The paper introduces the Inflation–Epistemic Coherence Index (IECI) and the Trust Coherence Index (TCI) as new diagnostic instruments linking economic stability to moral coherence.It establishes that central banking must evolve from control-based monetary policy to recursive trust modulation, where coherence, not calibration, defines stability.By reinterpreting inflation as recursive trust decay, this work initiates a paradigm shift from the illusion of control to the pursuit of coherence—marking the birth of Recursive Financial Epistemology within the YBIM ontology. -JSR