The Basket Residue Theory (BRT)

Abstract

This paper introduces the Basket Residue Theory (BRT) as a mathematical framework for assessing the real purchasing power of money, prosperity levels, poverty dynamics, and indirect wealth transfers in an economy. The model builds on variations in the prices of a representative basket of goods and services, offering a quantitative measure of real value erosion or enhancement over time. BRT extends beyond conventional inflation indices by integrating fiscal and monetary interactions into the valuation residue concept.