Hierarchical financial structures with money cascade
General Finance
2019-11-25 v1 Statistical Mechanics
Fluid Dynamics
History and Philosophy of Physics
Abstract
In this paper we show similarities between turbulence and financial systems. Motivated by similarities between the two systems, we construct a multiscale model for hierarchical financial structures that exhibits a constant cascade of wealth from large financial entities to small financial entities. According to our model, large and intermediate scale financial institutions have a power law distribution. However, the wealth distribution is Maxwellian at individual scales.
Keywords
Cite
@article{arxiv.1903.00313,
title = {Hierarchical financial structures with money cascade},
author = {Mahendra K. Verma},
journal= {arXiv preprint arXiv:1903.00313},
year = {2019}
}
Comments
to appear as a chapter in "New Perspectives and Challenges in Econophysics and Sociophysics", 2019