A stylized model for wealth distribution

Bertram D\"uring, Nicos Georgiou and Enrico Scalas
Authors registered in the RePEc Author Service: Bertram Düring

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Abstract: The recent book by T. Piketty (Capital in the Twenty-First Century) promoted the important issue of wealth inequality. In the last twenty years, physicists and mathematicians developed models to derive the wealth distribution using discrete and continuous stochastic processes (random exchange models) as well as related Boltzmann-type kinetic equations. In this literature, the usual concept of equilibrium in Economics is either replaced or completed by statistical equilibrium. In order to illustrate this activity with a concrete example, we present a stylised random exchange model for the distribution of wealth. We first discuss a fully discrete version (a Markov chain with finite state space). We then study its discrete-time continuous-state-space version and we prove the existence of the equilibrium distribution. Finally, we discuss the connection of these models with Boltzmann-like kinetic equations for the marginal distribution of wealth. This paper shows in practice how it is possible to start from a finitary description and connect it to continuous models following Boltzmann's original research program.

Date: 2016-09, Revised 2021-07
New Economics Papers: this item is included in nep-his
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Published in Economic Foundations for Social Complexity Science, Y.Aruka, A. Kirman (eds.), pp. 135-157, Evolutionary Economics and Social Complexity Science 9, Springer, Singapore, 2017

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1609.08978

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