dorsal/arxiv
View SchemaNonequilibrium Thermodynamics of Wealth Condensation
| Authors | Dieter Braun |
|---|---|
| Categories | |
| ArXiv ID | physics/0601191 |
| URL | https://arxiv.org/abs/physics/0601191 |
| DOI | 10.1016/j.physa.2006.01.085 |
Abstract
We analyze wealth condensation for a wide class of stochastic economy models on the basis of the economic analog of thermodynamic potentials, termed transfer potentials. The economy model is based on three common transfers modes of wealth: random transfer, profit proportional to wealth and motivation of poor agents to work harder. The economies never reach steady state. Wealth condensation is the result of stochastic tunneling through a metastable transfer potential. In accordance with reality, both wealth and income distribution transiently show Pareto tails for high income subjects. For metastable transfer potentials, exponential wealth condensation is a robust feature. For example with 10 % annual profit 1% of the population owns 50 % of the wealth after 50 years. The time to reach such a strong wealth condensation is a hyperbolic function of the annual profit rate.
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"abstract": "We analyze wealth condensation for a wide class of stochastic economy models\non the basis of the economic analog of thermodynamic potentials, termed\ntransfer potentials. The economy model is based on three common transfers modes\nof wealth: random transfer, profit proportional to wealth and motivation of\npoor agents to work harder. The economies never reach steady state. Wealth\ncondensation is the result of stochastic tunneling through a metastable\ntransfer potential. In accordance with reality, both wealth and income\ndistribution transiently show Pareto tails for high income subjects. For\nmetastable transfer potentials, exponential wealth condensation is a robust\nfeature. For example with 10 % annual profit 1% of the population owns 50 % of\nthe wealth after 50 years. The time to reach such a strong wealth condensation\nis a hyperbolic function of the annual profit rate.",
"arxiv_id": "physics/0601191",
"authors": [
"Dieter Braun"
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"categories": [
"physics.soc-ph",
"q-fin.GN"
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"doi": "10.1016/j.physa.2006.01.085",
"title": "Nonequilibrium Thermodynamics of Wealth Condensation",
"url": "https://arxiv.org/abs/physics/0601191"
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