Wealth Condensation in Pareto Macro-Economies
Abstract
We discuss a Pareto macro-economy (a) in a closed system with fixed total wealth and (b) in an open system with average mean wealth and compare our results to a similar analysis in a super-open system (c) with unbounded wealth. Wealth condensation takes place in the social phase for closed and open economies, while it occurs in the liberal phase for super-open economies. In the first two cases, the condensation is related to a mechanism known from the balls-in-boxes model, while in the last case to the non-integrable tails of the Pareto distribution. For a closed macro-economy in the social phase, we point to the emergence of a ``corruption'' phenomenon: a sizeable fraction of the total wealth is always amassed by a single individual.
Cite
@article{arxiv.cond-mat/0101068,
title = {Wealth Condensation in Pareto Macro-Economies},
author = {Z. Burda and D. Johnston and J. Jurkiewicz and M. Kaminski and M. A. Nowak and G. Papp and I. Zahed},
journal= {arXiv preprint arXiv:cond-mat/0101068},
year = {2009}
}
Comments
4 pages, 1 figure