Phys. Rev. E 65, 026102 (2002) [4 pages]Wealth condensation in pareto macroeconomiesReceived 21 March 2001; published 9 January 2002 We discuss a Pareto macroeconomy (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 [J.-P. Bouchaud and M. Mézard, Physica A 282, 536 (2000)]. 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 nonintegrable tails of the Pareto distribution. For a closed macroeconomy 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. © 2002 The American Physical Society URL:
http://link.aps.org/doi/10.1103/PhysRevE.65.026102
DOI:
10.1103/PhysRevE.65.026102
PACS:
05.70.Fh, 89.65.Gh, 89.75.Da
See AlsoComment: Ding-wei Huang, Comment on “Wealth condensation in Pareto macroeconomies”, Phys. Rev. E 68, 048101 (2003). |
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