1,530 research outputs found
Simple wealth distribution model causing inequality-induced crisis without external shocks
We address the issue of the dynamics of wealth accumulation and economic
crisis triggered by extreme inequality, attempting to stick to most possibly
intrinsic assumptions. Our general framework is that of pure or modified
multiplicative processes, basically geometric Brownian motions. In contrast
with the usual approach of injecting into such stochastic agent models either
specific, idiosyncratic internal nonlinear interaction patterns, or macroscopic
disruptive features, we propose a dynamic inequality model where the attainment
of a sizable fraction of the total wealth by very few agents induces a crisis
regime with strong intermittency, the explicit coupling between the richest and
the rest being a mere normalization mechanism, hence with minimal extrinsic
assumptions. The model thus harnesses the recognized lack of ergodicity of
geometric Brownian motions. It also provides a statistical intuition to the
consequences of Thomas Piketty's recent "" (return rate growth rate)
paradigmatic analysis of very-long-term wealth trends. We suggest that the
"water-divide" of wealth flow may define effective classes, making an objective
entry point to calibrate the model. Consistently, we check that a tax mechanism
associated to a few percent relative bias on elementary daily transactions is
able to slow or stop the build-up of large wealth. When extreme fluctuations
are tamed down to a stationary regime with sizable but steadier inequalities,
it should still offer opportunities to study the dynamics of crisis and the
inner effective classes induced through external or internal factors.Comment: 15 pages, 11 figures. Work initiated from discussion on Aristotle's
status revisited by Paul Jorion in the many cases where the law of supply and
demand fails. Accepted for publication in Physical Review E on April 19, 201
Milky Way and Andromeda past-encounters in different gravity models: the impact on the estimated Local Group mass
The Two-body problem of and the Milky Way (MW) galaxies with a
Cosmological Constant background is studied, with emphasis on the possibility
that they experienced Past Encounters. By implementing the Timing Argument
(TA), it is shown that if and the MW have had more than one encounter
then the deduced mass of the Local Group (LG) would be larger. Past encounters
are possible only for non-zero transverse velocity, and their viability is
subject to observations of the imprints of such near collisions. Using a recent
- based measurement of the transverse velocity we show that the presence
of the Cosmological Constant requires the mass for the LG to be higher:
with no Cosmological Constant or
with a Cosmological Constant
background. If the LG has had one past encounter, the LG mass is
with a Cosmological Constant
background. Modified Newtonian Dynamics (MOND) is studied as the accelerations
of the Local Group are fully in the deep-MOND regime. MOND yields the order of
magnitude for the expected baryonic mass only if at least one encounter
occurred. While we only consider the LG as two point masses, our calculations
provide a benchmark for future work with simulations to test Dynamical Friction
and other effects. This model can be also used to test screening mechanisms and
alternative theories of gravity.Comment: 16 pages. A revised versio
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