2003/04/25 by Yougui Wang, Ning Ding, Li Zhang · 31 citations
Economics, Econometrics and Finance · Mathematics · Physics and Astronomy · #Advanced Thermodynamics and Statistical Mechanics #Circulation (fluid dynamics) #Complex Systems and Time Series Analysis #Distribution (mathematics) #Econometrics #Economic theories and models #Economics #Endogenous money #Finance #Gamma distribution #Mathematical analysis #Mathematics #Mechanics #Monetary economics #Monetary policy #Order (exchange) #Physics #Poisson distribution #Statistics #Velocity of money #cond-mat.stat-mech #physics.soc-ph #q-fin.GN
paper · pdf · doi:10.1016/s0378-4371(03)00074-8
published in Physica A Statistical Mechanics and its Applications 324(3-4), 665-677 (Elsevier BV) · 20 pages, 6 figures
openalex publication_date 2003/04/25 · arxiv created 2005/07/20 · arxiv updated 2009/12/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05
We have studied the statistical mechanics of money circulation in a closed economic system. An explicit statistical formulation of the circulation velocity of money is presented for the first time by introducing the concept of holding time of money. The result indicates that the velocity is governed by behavior patterns of economic agents. Computer simulations have been carried out in order to demonstrate the shape of the holding time distribution. We find that, money circulation is a Poisson process in which the holding time probability distribution follows a type of Gamma distribution, and the velocity of money depends on the share for exchange and the number of agents.