EconPapers    
Economics at your fingertips  
 

Inequality reversal: Effects of the savings propensity and correlated returns

Anindya S. Chakrabarti and Bikas K. Chakrabarti

Physica A: Statistical Mechanics and its Applications, 2010, vol. 389, issue 17, pages 3572-3579

Abstract: In the last decade, a large body of literature has been developed to explain the universal features of inequality in terms of income and wealth. By now, it is established that the distributions of income and wealth in various economies show a number of statistical regularities. There are several models to explain such static features of inequality in a unifying framework, and the kinetic exchange models in particular provide one such framework. Here we focus on the dynamic features of inequality. In the process of development and growth, inequality in an economy in terms of income and wealth follows a particular pattern of rising in the initial stage followed by an eventual fall. This inverted U-shaped curve is known as the Kuznets Curve. We examine the possibilities of such behavior of an economy in the context of a generalized kinetic exchange model. It is shown that under some specific conditions, our model economy indeed shows inequality reversal.

Keywords: Inequality; Correlated returns; Kuznets curve; Kinetic exchange models (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378437110003778
Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eee:phsmap:v:389:y:2010:i:17:p:3572-3579

Access Statistics for this article

Physica A: Statistical Mechanics and its Applications is edited by K. A. Dawson, J. O. Indekeu, H.E. Stanley and C. Tsallis

More articles in Physica A: Statistical Mechanics and its Applications from Elsevier
Series data maintained by Zhang, Lei ().

 
Page updated 2013-12-22
Handle: RePEc:eee:phsmap:v:389:y:2010:i:17:p:3572-3579