A stylised model for wealth distribution

During, Bertram, Georgiou, Nicos and Scalas, Enrico (2017) A stylised model for wealth distribution. In: Akura, Yuji and Kirman, Alan (eds.) Economic Foundations of Social Complexity Science. Springer Singapore, Singapore, pp. 95-117. ISBN 9789811057045

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Abstract

The recent book by T. Piketty (Capital in the Twenty-First Century) promoted the important issue of wealth inequality. In the last twenty years, physicists and mathematicians developed models to derive the wealth distribution using discrete and continuous stochastic processes (random exchange models) as well as related Boltzmann-type kinetic equations. In this literature, the usual concept of equilibrium in economics is either replaced or completed by statistical equilibrium. In order to illustrate this activity with a concrete example, we present a stylised random exchange model for the distribution of wealth. We first discuss a fully discrete version (a Markov chain with finite state space). We then study its discretetime continuous-state-space version, and we prove the existence of the equilibrium distribution. Finally, we discuss the connection of these models with Boltzmannlike kinetic equations for the marginal distribution of wealth. This paper shows in practice how it is possible to start from a finitary description and connect it to continuous models following Boltzmann’s original research programme.

Item Type: Book Section
Schools and Departments: School of Mathematical and Physical Sciences > Mathematics
Research Centres and Groups: Numerical Analysis and Scientific Computing Research Group
Probability and Statistics Research Group
Subjects: Q Science > QA Mathematics
Depositing User: Billy Wichaidit
Date Deposited: 01 Sep 2017 11:57
Last Modified: 24 Oct 2017 11:10
URI: http://sro.sussex.ac.uk/id/eprint/69967

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