Econophysics colloquium

Date
Thu, Apr 2, 2020 11:50 am - 12:50 pm
Location
ZOOM

Description

VictorYakovenko, University of Maryland

https://wesleyan.zoom.us/j/869541729
Zoom doors open around 11:50 am, presentation starts at 12noon.

Economic Inequality from a Statistical Physics Point of View
Inequality is an important and seemingly inevitable aspect of the humansociety. Various manifestations of inequality can be derived from the conceptof entropy in statistical physics. In a stylized model of monetary economy,with a constrained money supply implicitly reflecting constrained resources,the probability distribution of money among the agents converges to theexponential Boltzmann-Gibbs law due to entropy maximization. Our empirical dataanalysis shows that income distributions in the USA, European Union, and othercountries exhibit a well-defined two-class structure. The majority of thepopulation (about 97%) belongs to the lower class characterized by theexponential ("thermal") distribution, which we recently uncovered inthe data for 67 countries around the world. In contrast, the upper class (about3% of the population) is characterized by the Pareto power-law("superthermal") distribution, and its share of the total incomeexpands and contracts dramatically during booms and busts in financial markets.Globally, energy consumption (and CO2 emissions) per capita around the worldshows decreasing inequality in the last 30 years and convergence toward theexponential probability distribution, as expected from the maximal entropyprinciple. All papers are available at http://physics.umd.edu/~yakovenk/econophysics/.

https://wesleyan.zoom.us/j/869541729
Zoom doors open around 11:50 am, presentation starts at 12 noon.