 A Quantum Field Perspective on Income Inequality and Wealth Concentration: Entropy Dynamics, Phase Transitions, and Redistribution in a Panel of 100 Economies, 1985--2025Sid Ahmed Zenagui MPRA Paper from University Library of Munich, Germany Abstract: This paper develops and estimates a quantum field theory (QFT)-informed framework for interpreting income inequality dynamics as a manifestation of wealth field interactions, symmetry breaking, and entropy dispersion across economic space. Departing from—but building upon—the established econophysics literature on Boltzmann-Gibbs and Pareto wealth distributions, we introduce a scalar wealth field $\phi(x,t)$ governed by a Lagrangian density with a double-well potential capable of generating inequality traps as spontaneous symmetry-breaking equilibria. This theoretical extension is motivated by three empirical observations that remain incompletely explained by existing frameworks: (i)~sudden, non-gradual wealth concentration episodes; (ii)~persistent inequality traps in developing economies; and (iii)~strongly asymmetric responses of inequality to redistribution shocks. Using an unbalanced panel of 100 developed and developing economies spanning 1985--2025 (up to 4,100 country-year observations), we estimate Pareto exponents via maximum likelihood, fit Boltzmann-Gibbs temperature parameters via moment matching, and test the QFT-augmented panel quantile regression specification against conventional panel fixed-effects and GMM baselines. Driscoll--Kraay standard errors account for cross-sectional dependence and temporal autocorrelation. Our main findings are: (i) the Pareto exponent has declined from approximately 2.84 (developed economies, 1985--1994) to 1.71 (developing economies, 2015--2025), indicating intensifying fat tails in the upper wealth distribution; (ii) the QFT wealth field potential exhibits double-well structure in high-inequality economies, consistent with symmetry-breaking inequality traps; (iii) a one-unit increase in the wealth field potential is associated with a 0.288 point increase in the Gini coefficient (FE estimate), while financial openness and capital income share amplify concentration; and (iv) panel quantile regressions reveal strongly heterogeneous effects, with the wealth field potential coefficient rising monotonically from 0.211 at the10 percentile to 0.388 at the 90, implying larger field effects precisely where inequality is already highest. These findings contribute to the literature by providing a unified theoretical framework that nests Boltzmann-Gibbs, Pareto, and field-theoretic approaches as special cases, and by delivering the first large-panel empirical evaluation of wealth field dynamics across both developed and developing economies. Keywords: Income inequality; wealth concentration; quantum field theory; econophysics; Boltzmann-Gibbs distribution; Pareto power law; inequality traps; phase transitions; panel quantile regression; 100 economies (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:129158 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.