2009/05/11 by Victor M. Yakovenko, J. Barkley Rosser · 1 voice · 3 citations
Economics, Econometrics and Finance · #q-fin.ST
paper · pdf · doi:10.1103/revmodphys.81.1703
published as Reviews of Modern Physics 81, 1703 (2009) · 24 pages, 13 figures; v.2 - minor stylistic changes and updates of references corresponding to the published version
arxiv published 2009/05/11 · arxiv created 2009/12/24 · arxiv updated 2009/12/24
This Colloquium reviews statistical models for money, wealth, and income distributions developed in the econophysics literature since the late 1990s. By analogy with the Boltzmann-Gibbs distribution of energy in physics, it is shown that the probability distribution of money is exponential for certain classes of models with interacting economic agents. Alternative scenarios are also reviewed. Data analysis of the empirical distributions of wealth and income reveals a two-class distribution. The majority of the population belongs to the lower class, characterized by the exponential ("thermal") distribution, whereas a small fraction of the population in the upper class is characterized by the power-law ("superthermal") distribution. The lower part is very stable, stationary in time, whereas the upper part is highly dynamical and out of equilibrium.