2011/05/11 by Geoff Willis, Willis, Geoff
Economics, Econometrics and Finance · #Complex Systems and Time Series Analysis #Economic Theory and Institutions #Economic theories and models #FOS: Economics and business #General Finance (q-fin.GN)
paper · pdf · doi:10.48550/arxiv.1105.2122
openalex publication_date 2011/05/11 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
This paper combines ideas from classical economics and modern finance with the general Lotka-Volterra models of Levy & Solomon to provide straightforward explanations of wealth and income distributions. Using a simple and realistic economic formulation, the distributions of both wealth and income are fully explained. Both the power tail and the log-normal like body are fully captured. It is of note that the full distribution, including the power law tail, is created via the use of absolutely identical agents. It is further demonstrated that a simple scheme of compulsory saving could eliminate poverty at little cost to the taxpayer.