dorsal/arxiv
View SchemaDynamic Process of Money Transfer Models
| Authors | Yougui Wang, Ning Ding |
|---|---|
| Categories | |
| ArXiv ID | physics/0507162 |
| URL | https://arxiv.org/abs/physics/0507162 |
Abstract
We have studied numerically the statistical mechanics of the dynamic phenomena, including money circulation and economic mobility, in some transfer models. The models on which our investigations were performed are the basic model proposed by A. Dragulescu and V. Yakovenko [1], the model with uniform saving rate developed by A. Chakraborti and B.K. Chakrabarti [2], and its extended model with diverse saving rate [3]. The velocity of circulation is found to be inversely related with the average holding time of money. In order to check the nature of money transferring process in these models, we demonstrated the probability distributions of holding time. In the model with uniform saving rate, the distribution obeys exponential law, which indicates money transfer here is a kind of Poisson process. But when the saving rate is set diversely, the holding time distribution follows a power law. The velocity can also be deduced from a typical individual's optimal choice. In this way, an approach for building the micro-foundation of velocity is provided. In order to expose the dynamic mechanism behind the distribution in microscope, we examined the mobility by collecting the time series of agents' rank and measured it by employing an index raised by economists. In the model with uniform saving rate, the higher saving rate, the slower agents moves in the economy. Meanwhile, all of the agents have the same chance to be the rich. However, it is not the case in the model with diverse saving rate, where the assumed economy falls into stratification. The volatility distribution of the agents' ranks are also demonstrated to distinguish the differences among these models.
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"abstract": "We have studied numerically the statistical mechanics of the dynamic\nphenomena, including money circulation and economic mobility, in some transfer\nmodels. The models on which our investigations were performed are the basic\nmodel proposed by A. Dragulescu and V. Yakovenko [1], the model with uniform\nsaving rate developed by A. Chakraborti and B.K. Chakrabarti [2], and its\nextended model with diverse saving rate [3]. The velocity of circulation is\nfound to be inversely related with the average holding time of money. In order\nto check the nature of money transferring process in these models, we\ndemonstrated the probability distributions of holding time. In the model with\nuniform saving rate, the distribution obeys exponential law, which indicates\nmoney transfer here is a kind of Poisson process. But when the saving rate is\nset diversely, the holding time distribution follows a power law. The velocity\ncan also be deduced from a typical individual\u0027s optimal choice. In this way, an\napproach for building the micro-foundation of velocity is provided. In order to\nexpose the dynamic mechanism behind the distribution in microscope, we examined\nthe mobility by collecting the time series of agents\u0027 rank and measured it by\nemploying an index raised by economists. In the model with uniform saving rate,\nthe higher saving rate, the slower agents moves in the economy. Meanwhile, all\nof the agents have the same chance to be the rich. However, it is not the case\nin the model with diverse saving rate, where the assumed economy falls into\nstratification. The volatility distribution of the agents\u0027 ranks are also\ndemonstrated to distinguish the differences among these models.",
"arxiv_id": "physics/0507162",
"authors": [
"Yougui Wang",
"Ning Ding"
],
"categories": [
"physics.soc-ph",
"cond-mat.stat-mech",
"q-fin.GN"
],
"title": "Dynamic Process of Money Transfer Models",
"url": "https://arxiv.org/abs/physics/0507162"
},
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