Physical Macroeconomics : Part IX – GDP Distribution and Economic Stability

The relationship between the distribution of GDP and sustainable economic development is considered.The main objective of the global economy harmonization is to ensure a balanced distribution of the world GDP. The growing economic inequality, financial and social crises as well as environmental destruction are the consequences of the GDP distribution imbalance. An important contribution to the solution of this problem would be an introduction of the dynamic added value taxation (DAVT), instead of a static VAT which is a destabilizing factor in the economy which could eventually become a universal tax.The distribution of free energy in biological systems is balanced due to stabilizing negative feedback – nutritional and metabolic feedback. The distribution of the global economy working potential (world GDP) is unbalanced, and this imbalance is the main cause of crises and social instability. Unbalanced GDP distribution leads to excessive income and tax inequality, which slows economic growth.The current static tax system is a destabilizing factor because it does not provide a balanced distribution of GDP. The solution to the problem is to replace the static VAT with a dynamic added value tax (DAVT). The DAVT theory is presented