2014/10/14 by Elvis Oltean, Oltean, Elvis
Economics, Econometrics and Finance · #Complex Systems and Time Series Analysis #Economic Theory and Policy #Economic theories and models #FOS: Economics and business #FOS: Physical sciences #General Finance (q-fin.GN) #Physics and Society (physics.soc-ph)
paper · pdf · doi:10.48550/arxiv.1410.3860
openalex publication_date 2014/10/14 · openalex created_date 2022/10/01 · openalex updated_date 2026/07/28
Polynomial distribution can be applied to dynamical systems in certain\nsituations. Macroeconomic systems characterized by economic variables such as\nincome and wealth can be modelled similarly using polynomials. We extend our\nprevious work to data regarding income from a more diversified pool of\ncountries, which contains developed countries with high income, developed\ncountries with middle income, developing and underdeveloped countries. Also,\nfor the first time we look at the applicability of polynomial distribution to\nexpenditure (consumption). Using cumulative distribution function, we found\nthat polynomials are applicable with a high degree of success to the\ndistribution of income to all countries considered without significant\ndifferences. Moreover, expenditure data can be fitted very well by this\npolynomial distribution. We considered a distribution to be robust if the\nvalues for coefficient of determination are higher than 90%. Using this\ncriterion, we decided the degree for the polynomials used in our analysis by\ntrying to minimize the number of coefficients, respectively first or second\ndegree. Lastly, we look at possible correlation between the values from\ncoefficient of determination and Gini coefficient for disposable income.\n