Monetary economics from econophysics perspective

This is an invited article for the Discussion and Debate special issue of The European Physical Journal Special Topics on the subject "Can Economics Be a Physical Science?" The first part of the paper traces the personal path of the author from theoretical physics to economics. It briefly summarizes applications of statistical physics to monetary transactions in an ensemble of economic agents. It shows how a highly unequal probability distribution of money emerges due to irreversible increase of entropy in the system. The second part examines deep conceptual and controversial issues and fallacies in monetary economics from econophysics perspective. These issues include the nature of money, conservation (or not) of money, distinctions between money vs. wealth and money vs. debt, creation of money by the state and debt by the banks, the origins of monetary crises and capitalist profit. Presentation uses plain language understandable to laypeople and may be of interest to both specialists and general public.Comment: 23 pages, 1 figur

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

Hopf invariant for long-wavelength skyrmions in quantum Hall systems for integer and fractional fillings

We show that a Hopf term exists in the effective action of long-wavelength skyrmions in quantum Hall systems for both odd integer and fractional filling factors $\nu = 1/(2s +1)$, where $s$ is an integer. We evaluate the prefactor of the Hopf term using Green function method in the limit of strong external magnetic field using model of local interaction. The prefactor ($N$) of the Hopf term is found to be equal to $\nu$. The spin and charge densities and hence the total spin and charge of the skyrmion are computed from the effective action. The total spin is found to have a dominant contribution from the Berry term in the effective action and to increase with the size of the skyrmion. The charge and the statistics of the skyrmion, on the other hand, are completely determined by the prefactor of the Hopf term. Consequently, the skyrmions have charge $\nu e$ and are Fermions (anyons) for odd integer (fractional) fillings. We also obtain the effective action of the skyrmions at finite temperature. It is shown that at finite temperature, the value of the prefactor of the Hopf term depends on the order in which the zero-momentum and zero-frequency limits are taken.Comment: Replaced with revised versio

Evidence for the exponential distribution of income in the USA

Using tax and census data, we demonstrate that the distribution of individual income in the USA is exponential. Our calculated Lorenz curve without fitting parameters and Gini coefficient 1/2 agree well with the data. From the individual income distribution, we derive the distribution function of income for families with two earners and show that it also agrees well with the data. The family data for the period 1947-1994 fit the Lorenz curve and Gini coefficient 3/8=0.375 calculated for two-earners families.Comment: 4 pages, including 5 figures. Uses Springer Verlag style classes for Eur. Phys. J. B (included). Submitted to the proceedings of APFA2 conference. V.2: minor stylistic improvement