Statistical mechanics approach to the probability distribution of money
Abstract
This Chapter reviews statistical models for the probability distribution of money developed in the econophysics literature since the late 1990s. In these models, economic transactions are modeled as random transfers of money between the agents in payment for goods and services. Starting from the initially equal distribution of money, the system spontaneously develops a highly unequal distribution of money analogous to the Boltzmann-Gibbs distribution of energy in physics. Boundary conditions are crucial for achieving a stationary distribution. When debt is permitted, it destabilizes the system, unless some sort of limit is imposed on maximal debt.
Keywords
Cite
@article{arxiv.1007.5074,
title = {Statistical mechanics approach to the probability distribution of money},
author = {Victor M. Yakovenko},
journal= {arXiv preprint arXiv:1007.5074},
year = {2012}
}
Comments
11 pages, 4 figures. This is an invited chapter to the book "New approaches to monetary theory: Interdisciplinary perspectives", edited by Heiner Ganssmann, to be published by Routledge in 2011, proceedings of the workshop "Money - Interdisciplinary Perspectives", Department of Sociology, Free University of Berlin, 25-27 June 2009