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DISTRIBUTIONS OF MONEY IN MODEL MARKETS OF ECONOMY

Anirban Chakraborti ()
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Anirban Chakraborti: Saha Institute of Nuclear Physics, 1/AF Bidhan Nagar, Kolkata 700 064, India

International Journal of Modern Physics C (IJMPC), 2002, vol. 13, issue 10, 1315-1321

Abstract: We study the distributions of money in a simple closed economic system for different types of monetary transactions. We know that for arbitrary and random sharing with locally conserving money transactions, the money distribution goes to the Gibb's distribution of statistical mechanics. We then consider the effects of savings, etc. and see how the distribution changes. We also propose a new model where the agents invest equal amounts of money in each transaction. We find that for short time-period, the money distribution obeys a power-law with an exponent very close to unity, and has an exponential tail; after a very long time, this distribution collapses and the entire amount of money goes to a tiny fraction of the population.

Keywords: Econophysics; simulation; market; power-law (search for similar items in EconPapers)
Date: 2002
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