46,160 research outputs found
Kinetic Exchange Models for Income and Wealth Distributions
Increasingly, a huge amount of statistics have been gathered which clearly
indicates that income and wealth distributions in various countries or
societies follow a robust pattern, close to the Gibbs distribution of energy in
an ideal gas in equilibrium. However, it also deviates in the low income and
more significantly for the high income ranges. Application of physics models
provides illuminating ideas and understanding, complementing the observations.Comment: 15 pages, 20 eps figures, EPJ class; To be published as "Colloquium"
in Eur Phys J
Wealth, income, earnings and the statistical mechanics of flow systems
This paper looks at empirical data from economics regarding wealth, earnings and income, alongside a
flow model for an economy based on the general Lotka-Volterra models of Levy & Solomon. The data and modelling suggest that a simple economic system might provide a tractable model for giving an exact statistical mechanical solution for an 'out of equilibrium' flow model. This might also include an exact mathematical definition of a 'dissipative structure' derived from maximum entropy
considerations. This paper is primarily a qualitative discussion of how such a mathematical proof might be achieved
Econophysics, Statistical Mechanics Approach to
This is a review article for Encyclopedia of Complexity and System Science,
to be published by Springer http://refworks.springer.com/complexity/. The paper
reviews statistical models for money, wealth, and income distributions
developed in the econophysics literature since late 1990s.Comment: 24 pages, 11 figures, 151 citations. V.2: one reference added. V.3:
many minor corrections, some references added. V.4: many minor stylistic
corrections incorporated after receiving the proof
Economic Inequality: Is it Natural?
Mounting evidences are being gathered suggesting that income and wealth
distribution in various countries or societies follow a robust pattern, close
to the Gibbs distribution of energy in an ideal gas in equilibrium, but also
deviating significantly for high income groups. Application of physics models
seem to provide illuminating ideas and understanding, complimenting the
observations.Comment: 7 pages, 2 eps figs, 2 boxes with text and 2 eps figs; Popular review
To appear in Current Science; typos in refs and text correcte
Why Money Trickles Up - Wealth & Income Distributions
This paper combines ideas from classical economics and modern finance with
the general Lotka-Volterra models of Levy & Solomon to provide straightforward
explanations of wealth and income distributions. Using a simple and realistic
economic formulation, the distributions of both wealth and income are fully
explained. Both the power tail and the log-normal like body are fully captured.
It is of note that the full distribution, including the power law tail, is
created via the use of absolutely identical agents. It is further demonstrated
that a simple scheme of compulsory saving could eliminate poverty at little
cost to the taxpayer.Comment: 45 pages of text, 36 figure
Dynamics of Money and Income Distributions
We study the model of interacting agents proposed by Chatterjee et al that
allows agents to both save and exchange wealth. Closed equations for the wealth
distribution are developed using a mean field approximation. We show that when
all agents have the same fixed savings propensity, subject to certain well
defined approximations defined in the text, these equations yield the
conjecture proposed by Chatterjee for the form of the stationary agent wealth
distribution. If the savings propensity for the equations is chosen according
to some random distribution we show further that the wealth distribution for
large values of wealth displays a Pareto like power law tail, ie P(w)\sim
w^{1+a}. However the value of for the model is exactly 1. Exact numerical
simulations for the model illustrate how, as the savings distribution function
narrows to zero, the wealth distribution changes from a Pareto form to to an
exponential function. Intermediate regions of wealth may be approximately
described by a power law with . However the value never reaches values of
\~ 1.6-1.7 that characterise empirical wealth data. This conclusion is not
changed if three body agent exchange processes are allowed. We conclude that
other mechanisms are required if the model is to agree with empirical wealth
data.Comment: Sixteen pages, Seven figures, Elsevier style file. Submitted to
Physica
Basic kinetic wealth-exchange models: common features and open problems
We review the basic kinetic wealth-exchange models of Angle [J. Angle, Social
Forces 65 (1986) 293; J. Math. Sociol. 26 (2002) 217], Bennati [E. Bennati,
Rivista Internazionale di Scienze Economiche e Commerciali 35 (1988) 735],
Chakraborti and Chakrabarti [A. Chakraborti, B. K. Chakrabarti, Eur. Phys. J. B
17 (2000) 167], and of Dragulescu and Yakovenko [A. Dragulescu, V. M.
Yakovenko, Eur. Phys. J. B 17 (2000) 723]. Analytical fitting forms for the
equilibrium wealth distributions are proposed. The influence of heterogeneity
is investigated, the appearance of the fat tail in the wealth distribution and
the relaxation to equilibrium are discussed. A unified reformulation of the
models considered is suggested.Comment: Updated version; 9 pages, 5 figures, 2 table
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