Theory_of_Negative_Contract

The present work introduces a new analytical category for describing monetary exchange — the negative contract — and proposes viewing any monetary transaction as a bilateral contract with a persisting system state after its completion. In standard economic interpretation, a transaction is considered complete at the moment of settlement: Seller A receives monetary funds, Buyer B receives goods or services, the exchange is closed. The present work proposes an alternative description: in addition to the transfer of monetary funds and goods, a transaction generates a directed link between A and B that persists over time and is not captured by existing analytical instruments. This link is characterized by a vector indicating the direction of monetary flow and a scalar equal to the transaction amount. The aggregate of such links accumulated in an economic system forms a structure of negative contracts — an observable magnitude reflecting the directed redistribution of monetary funds between economic agents. Unlike aggregate inequality indicators, this structure cannot be collapsed into a single number without loss of information: the direction of flow, rather than volume alone, carries independent analytical content. The work describes the properties of the negative contract, establishes its non-transferability and distinction from debt obligations, examines the temporal and multi-circuit nature of the indicator, and illustrates its analytical potential across concrete economic situations.

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Publication Details

Journal
Zenodo (CERN European Organization for Nuclear Research)
Published
2026-06-16
DOI
https://doi.org/10.5281/zenodo.20721700
Primary Topic
Economic theories and models
Type
preprint
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preprint

Theory_of_Negative_Contract

Evgeny Pustovoy
Zenodo (CERN European Organization for Nuclear Research)
Economic theories and models
preprint

Theory_of_Negative_Contract

Evgeny Pustovoy
preprint en

Abstract

The present work introduces a new analytical category for describing monetary exchange — the negative contract — and proposes viewing any monetary transaction as a bilateral contract with a persisting system state after its completion. In standard economic interpretation, a transaction is considered complete at the moment of settlement: Seller A receives monetary funds, Buyer B receives goods or services, the exchange is closed. The present work proposes an alternative description: in addition to the transfer of monetary funds and goods, a transaction generates a directed link between A and B that persists over time and is not captured by existing analytical instruments. This link is characterized by a vector indicating the direction of monetary flow and a scalar equal to the transaction amount. The aggregate of such links accumulated in an economic system forms a structure of negative contracts — an observable magnitude reflecting the directed redistribution of monetary funds between economic agents. Unlike aggregate inequality indicators, this structure cannot be collapsed into a single number without loss of information: the direction of flow, rather than volume alone, carries independent analytical content. The work describes the properties of the negative contract, establishes its non-transferability and distinction from debt obligations, examines the temporal and multi-circuit nature of the indicator, and illustrates its analytical potential across concrete economic situations.

Zenodo (CERN European Organization for Nuclear Research)
Reduced inequalities
Economic theories and models
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