Compound Economic Fragility: A Mutual Threshold Saturation Analysis of U.S. Domestic Resilience

Abstract

This paper introduces Compound Economic Fragility as a post-Keynesian framework for measuring the U.S. domestic economy's proximity to a threshold at which simultaneous stress across multiple domains produces cascading failure that no single policy instrument can arrest. Drawing on the Minskyan tradition of endogenous fragility accumulation, Godley's sectoral balances accounting, and the functional income distribution literature, the paper develops a six-domain Compound Fragility Index (CFI) parameterised with 45 Federal Reserve Economic

Keywords: economic fragility, effective demand, fiscal sustainability, financialisation, threshold saturation, post-Keynesian economics

JEL Classification: B50, E12, E21, E62, J01, F13